Warner Bros. to cut costs by $200 million a year, shed employees
Warner Bros.’ film and television studio, which had an uncharacteristically poor summer at the box office, will cut its annual overheard by $200 million, Chief Executive Kevin Tsujihara said Wednesday at a Time Warner investors meeting in New York.
Burbank-based Warner Bros., a unit of Time Warner Inc., is set to embark on a round of layoffs by early November. Although there is no set number of job cuts, the reductions are expected to be significant, affecting all divisions of the studio, the Los Angeles Times has reported.
“We are firmly committed to improving our margins,” Tsujihara said. “Through that process we have committed to cutting costs significantly.”
Tsujihara did not disclose the number of jobs that would be eliminated.
The studio released a handful of duds during the summer, including “Blended” and “Jersey Boys,” and now finds itself in unfamiliar territory: third place in domestic box-office share. The studio has finished No. 1 or No. 2 in nine of the last 10 years.
“We had a tough summer,” Tsujihara said. “Domestic box office was down substantially, not just for Warner Bros. but across the industry.”
Tsujihara said that the cost-cutting initiative and the company’s forthcoming film slate -- which includes several new films based on popular DC Comics characters -- would help Warner Bros. generate “high single-digit growth in adjusted operating income.”
The Wednesday event, which was hosted by Time Warner Chief Executive Jeff Bewkes, included presentations from the heads of each of the company’s major divisions.
Bewkes and his team made a case for Time Warner’s business strategy in the wake of 21st Century Fox’s scuttled attempt to buy it for $80 billion.
Shares of Time Warner on Wednesday were up $1.52 to $72.16 in midmorning trading.
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