A restructuring at WarnerMedia will result in a workforce reduction as much as 20%, according to The Wall Street Journal.
Thousands of employees across Warner Bros. studios, HBO, TBS, and TNT will be impacted by the layoffs in the coming weeks.
Shares of parent company AT&T (NYSE: T) slipped 0.66% on Thursday.
According to The Wall Street Journal report, the overhaul stems from the impact of the pandemic on declining sales of movie tickets, cable subscriptions, and television ads.
In a statement, WarnerMedia says that it has “not been immune to the significant impact of the pandemic” across the entertainment sector.
“That includes an acceleration in shifting consumer behavior, especially in the way content is being viewed.”
The statement goes on to say that the company is restructuring to focus on growth opportunities such as direct-to-consumer, which requires shifting money out of different areas.
It’s been a turbulent few months for WarnerMedia. After Jason Kilar stepped into the CEO role in the spring, a wave of executive changes followed. The most notable shakeup was the dismissal of HBO Max’s Bob Greenblatt and Kevin Reilly shortly after the new streaming platform launched.
WarnerMedia also laid off nearly 600 workers in August.
As the pandemic altered the entertainment sector, WarnerMedia has struggled to compete. While newly-launched HBO Max has 36 million subscribers, it is still far behind rival Disney+, which boasts 60 million subscribers.
Warner Bros. bravely released its hyped film “Tenet” during the pandemic. Although it reached the top spot at the box office, its sales were still very sluggish because most movie theaters are still closed.
All of this restructuring comes as AT&T is trying to offload DirecTV and clear some debt off its books.