More layoffs will be part of the media and entertainment industry’s reckoning in 2024 as mounting costs and debt-ridden balance sheets continue to burden the struggling industry.
These companies have cut billions of dollars worth of expenses in the last year, in part to placate Wall Street. They also introduced ad-supported tiers, bundled their products, and increased the monthly cost of subscription plans due to profit pressure.
All of that, however, was insufficient to appease investors.
Valuation levels are still low. Furthermore, there is still a long way to go before streaming becomes profitable, as almost all media companies—Netflix excluded—lose money on it. The final result is more layoffs.
Regarding layoffs in 2024, the following is what leading media and entertainment companies are thinking about:
About 800 workers, or about 3% of Paramount Global’s workforce, were let go, according to people familiar with the situation who spoke with Yahoo Finance.
The cuts, which were made on February 13, coincide with speculations about a possible M&A deal for the media behemoth.
Bob Bakish, the CEO of Paramount, reaffirmed in an internal memo to staff that layoffs are required to get the company back to growing profits. “I am confident this is the right decision for our future,” he wrote.
Even the massive tech company Alphabet (GOOG, GOOGL) has experienced layoffs.
A representative for the company confirmed to Yahoo Finance that it laid off 100 workers from its creator management and operations divisions in mid-January. This was the first corporate reorganization in a decade. 7,173 people work at YouTube worldwide.
The operations and creator management teams at YouTube will be impacted by the cuts, according to an internal memo that Yahoo Finance obtained.
The layoffs occurred after Alphabet cut thousands of positions in its hardware, advertising, and engineering departments in an attempt to lower headcount.
In a widely reported internal memo, Alphabet CEO Sundar Pichai stated that more layoffs would probably be required throughout the entire organization in 2024 for the business to meet its objectives.
Despite posting record-breaking fourth-quarter earnings results, Warner Music Group (WMG) announced it will be laying off 600 employees, or around 10% of its total workforce.
CEO Robert Kyncl explained to the staff in a memo that the layoffs are a part of “a plan to free up more funds to invest in music and accelerate our growth for the next decade.” By the end of September 2025, the layoffs will have produced annualized cost savings of about $200 million.
“As we carry out our plan, it’s important to bear in mind why we’re making these difficult choices,” the memo continued. “We’re getting on the front foot to create a sustainable competitive advantage over the next decade. We’ll do so by increasing funding behind artists and songwriters, new skill sets, and tech, to help us deliver on our three strategic priorities.”
One of the biggest record labels in the business, Universal Music Group (UMG), intends to fire hundreds of workers later this quarter.
The layoffs, which are part of a larger restructuring, will be the biggest since the company went public in 2021.
Although UMG declined to confirm the report in its entirety, a representative alluded to the reductions in a corporate statement given to Yahoo Finance: “We are creating efficiencies in other areas of the business so we can remain nimble and responsive to the dynamic market while realizing the benefits of our scale.”
Disney’s (DIS) animation division plans to let go of up to 20% of its 1,300 workers. The company’s box office has struggled, and streaming profitability is lagging. This has led to the cuts.
Buzzfeed announced that it would “reduce centralized costs and allow the company to become more agile, sustainable, and profitable” by laying off 16% of its staff.
The media company said it would sell Complex to live video shopping platform NTWRK for $108.6 million in cash in addition to announcing the layoffs. The company also received about $5.7 million in charges related to office space and severance in addition to the purchase price.
The news was released less than a year after Buzzfeed declared that it would close its news division and lay off 15% of its workforce, or approximately 180 employees.
Startup for digital news Less than a year will pass before The Messenger closes its doors in May 2023.
The company was started by media entrepreneur Jimmy Finkelstein, who at the time employed about 300 journalists.
One day after the company folded, former employees filed a proposed class-action lawsuit against it because they were unaware that the shutdown was imminent.
Finkelstein attributed “economic headwinds” that have beset media companies generally in a memo to employees that was referenced by numerous outlets. He wrote, “Unfortunately, as a new company, we encountered even more significant challenges than others and could not survive those headwinds.”
Comcast (CMCSA) owns the British media company Sky Group, which intends to cut 1,000 jobs over the upcoming year, with a large percentage of job losses occurring in its engineering division. That is approximately equivalent to 4% of the company.
The announcement follows hundreds of job cuts made by the company last year as it prepared to switch from satellite to internet-based TV.
A Sky representative said, “The launch of Sky Glass and Sky Stream represents a shift in our business to deliver TV over IP (an internet connection) rather than satellite. Increasingly, customers are choosing Sky Glass and Sky Stream which don’t require specialist installation, and that has led us to change the number of roles we need to deliver our services.”
As part of a larger restructuring effort, the newspaper intends to fire a few employees from its Washington bureau, according to a person familiar with the situation.
Axios was the first to report on the change, which will result in some economics coverage from Washington moving to New York. Those whose jobs are eliminated will have the opportunity to apply for new positions.
The online publication, which is a division of German publisher Axel Springer SE, announced on January 25 that it will lay off “about 8%” of its workforce. This is part of a nationwide trend in which major news organizations have been making layoffs lately.
“We closed out last year with a plan in place, a clear target audience, and a vision,” Business Insider CEO Barbara Peng wrote in a memo to staff. “This year is about making it happen and focusing our company and efforts towards this future. Unfortunately, this also means we need to scale back in some areas of our organization.”
The cuts do represent the second round of layoffs in less than a year, though it was not immediately clear how many employees would be affected.
On January 23, the Los Angeles Times announced massive layoffs that resulted in the termination of at least 115 employees, or about 20% of its newsroom.
The Times said that in the 142-year history of the newspaper, this staff reduction was the biggest.
Dr. Patrick Soon-Shiong, the paper’s owner, said the cuts were required to make up for the loss of up to $40 million annually as a result of a depressing advertising climate.
Following the revocation of its publisher, Arena Group Holdings, license to operate the publication, one of the most illustrious sports publications fired the majority, if not all, of its employees last week.
Authentic Brands Group, the magazine’s owner since 2019, was not paid $3.8 million in licensing fees by Arena Group on a quarterly basis. In the same year, Authentic Brands Group struck a 10-year agreement to sell Arena Group the publishing rights.
The union for the magazine released a statement in response to the news, saying, “This is another difficult day in what has been a difficult four years for Sports Illustrated under Arena Group.”
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