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Serious layoffs are expected as AT&T integrates WarnerMedia and transforms its business around direct-to-consumer streaming, per The Hollywood Reporter.
But while the integration will result in hundreds — possibly thousands — of layoffs, there is expected to be an equal and opposite hiring push related to the company’s emergent priorities around streaming video.
- Legacy functions are likely to be deprioritized across the company. Amid the integration, the most at-risk jobs will be in affiliate sales, marketing, and administration. Beyond erasing redundancies in those functions, workers in these roles will be fundamentally deprioritized as the company looks to specializations that more directly figure into the new business, like on the content delivery or content production sides of the house.
- Hiring will increasingly focus on building out the direct-to-consumer content businesses. Most of the layoffs are expected to come from HBO and Turner as the Turner brand is subsumed into the larger company. That said, few of those layoffs are likely to come from those who work on creative content for the networks, according to recent comments by newly hired WarnerMedia CEO Bob Greenblatt. Further, groups of creatives will be kept distinct in order to preserve the integrity and power of each content brand. If WarnerMedia sought to remove redundant positions from its distinct creative units, the company might risk diluting its network brands with a homogeneous product.
WarnerMedia's hiring strategy will prioritize content across distinctive brands. Brand identity, brand strength, and content differentiation will likely be the key to luring subs to WarnerMedia’s streaming services. In fact, Greenblatt recently argued that "Netflix doesn't have a brand," providing a peek into how WarnerMedia's service might be positioned in the marketplace.
While we disagree with Greenblatt, we do believe that legacy media companies entering the highly competitive SVOD market will only attract a sustainable sub base if they have strong, differentiated content brands. As legacy media companies face off with the likes of Netflix and others, they're likely to rely more heavily on consumer perception of their network brands. We expect this pressure to differentiate with content to only grow more intense.
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