A number of entertainment conglomerates and media companies are announcing layoffs as the macroeconomy continues to impact several industries.
Technology companies such as Amazon, Microsoft, and Tesla have announced hiring pauses or layoffs for their corporate offices over the past several months, citing recessionary risk and broader economic uncertainty. Leaders in the media sector are referencing similar issues.
Warner Bros Television slashed 26% of headcount across scripted, unscripted, and animation divisions, according to a memo sent by Warner Bros Television CEO Channing Dungey and obtained by Deadline. “These are challenging times in the world at large, and a tumultuous time in our industry,” she wrote. “But my hope is that these changes, made with an eye to a more focused business strategy, will strengthen and stabilize our company, maintain our great creative output, and better position us for continued future success.”
Following a lackluster quarterly earnings report, former Disney CEO Bob Chapek said earlier this month that the entertainment giant would implement a hiring freeze and eliminate some positions, according to a message sent to executives and obtained by CNBC. “Hiring for the small subset of the most critical, business-driving positions will continue, but all other roles are on hold,” said Chapek, who was replaced over the weekend by predecessor Bob Iger.
Shares for Warner Bros Discovery have fallen nearly 59% since the beginning of the year, while shares for Disney have plummeted 39%. The Dow Jones Industrial Average and the S&P 500 have respectively declined 7% and 17% over the same period.
Despite a rise in economic output during the third quarter, the United States previously met the rule-of-thumb definition of a recession, two consecutive quarters of negative growth, as output contracted at a 1.6% annualized rate in the first quarter and a 0.6% pace in the second quarter. Officials in the Biden administration have nevertheless insisted that the economy as a whole has been experiencing a normal recovery. After the release of the preliminary third quarter output forecast, Biden claimed that “doomsayers” had been “rooting for a downturn” while falsely arguing that the nation was in a recession.
Digital media device manufacturer Roku announced last week that roughly 5% of staff will be dismissed in order to decrease the company’s “operating expense growth rate due to current economic conditions,” according to a report from The Hollywood Reporter. Other companies reducing headcount include Comcast, the parent company of NBCUniversal, and Paramount Global, which controls CBS and MTV, according to a report from Axios.
Gannett, a media conglomerate which owns more than 250 local news outlets, announced three months ago that executives would begin “necessary but painful reductions to staffing” while eliminating some open positions. Over 360 newspapers had already closed their doors between late 2019 and the spring of 2022, according to a report from Northwestern University, meaning that the nation is on pace to lose one-third of local newspapers between 2005 and 2025.
The layoffs in the entertainment sector occur as investors criticize large companies, especially in the technology space, for maintaining bloated payrolls. Twitter CEO Elon Musk reduced the social media company’s headcount by half immediately following the acquisition.
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