In Warner bids, workers may be the biggest losers

Netflix and Paramount acquisition scenarios differ, but both plans entail cost cutting.

- BY MEG JAMES AND SAMANTHA MASUNAGA

Employment in Hollywood has already been bleak. But with the impending sale of Warner—whether it's the whole company to Paramount or the studios, HBO and HBO Max to Netflix — that picture could become even dimmer.

Industry workers fear that a consolidation between two major players in Hollywood could further decrease production and lead to the sweeping job cuts that typically occur after big corporate acquisitions. Many have pointed to the downsizing that followed Walt Disney Co.'s $71-billion purchase in 2019 of much of Rupert Murdoch's Fox entertainment assets.

More than 4,000 people lost their jobs, according to industry sources. As part of the tie-up, Disney dramatically scaled back the staff and movie pipeline at the once prolific 20th Century Fox movie studio and eventually folded much of Fox's TV production operations into an ABC-led studio. A parade of film executives shuffled out the door.

"We've seen this play out," said Kevin Klowden, an executive director at the nonprofit Milken Institute Finance. "It's going to happen again."

Discovery's takeover of the Warner assets in 2022 also prompted successive rounds of layoffs, and the Larry Ellison family's purchase in August of Paramount has prompted more than 2,000 job cuts.

Both Netflix and Paramount have told Wall Street analysts that their takeover plans for Warner would involve cost cutting.

Paramount has promised more than $6 billion in cuts over three years, Andy Gordon, Paramount's chief operating and chief strategy officer, told analysts during a Monday call.

"We feel confident in our $6-billion number after doing due diligence extensively with Warner Bros.," said Gordon, a prominent former Goldman Sachs banker.