Warner Discovery CEO David Zaslav was forced to lay off hundreds; he reveals why
Warner Bros Discovery CEO David Zaslav encountered numerous contentious decisions while undertaking the overhaul of the newly merged company in 2022. Following the merger, Warner Bros. Discovery laid off hundreds of employees in various rounds spanning several divisions, including its cable channels and news network CNN.
Additionally, the ill-fated streaming service CNN+, which launched just a month prior, was shut down. “When we took over the company, we said, no sacred cows. What would this business look like if we were going to start today,” said Zaslav according to a report by Fortune.
“Worst day on the job was the first day that we laid off a huge number of people—a lot of people I knew and worked with for many years, a lot of people I respected,” he told. But he defended them as necessary, saying, “The business had changed. It used to be that you could have 80–100 people at every cable channel, but now you have one marketing team running all of it,” Zaslav referred to those layoffs as the most challenging period during his time as CEO.
Zaslav contended that the "generational disruption" caused by streaming necessitated a reshaping of the media industry to keep up. Before the merger between Discovery and Warner Bros., which Zaslav is acknowledged for leading, he argued that the two companies were not appropriately organised to confront these changes.
"Warner Bros. and Time Warner are companies that had never been restructured for the future," Zaslav stated.
According to Zaslav, that future involves a "healthy company" that no longer incurs losses on streaming content and is more selective about its productions. Before the merger, Warner was spending $36 billion on content and operating at a loss, Zaslav noted.
He expressed concerns about the fervent pursuit of streaming subscribers by many media companies, driven by Netflix's dominance. "We plan on being careful and judicious," Mr. Zaslav told investors in February 2022, a few months before the merger closed. "Our goal is to compete with the leading streaming services, not to win the spending war."
Since leading the new company, Zaslav, accompanied by his dependable lieutenant and WBD chief financial officer Gunnar Wiedenfels, has concentrated on enhancing cash flows to settle the $56 billion in debt WBD incurred for the merger. Onstage, Zaslav mentioned that the company had produced $5 billion in free cash flow in the past 12 months. As per a third-quarter earnings statement, the company has already reduced $12 billion of its debt.