Job cuts are looming at HBO as corporate owner Time Warner continues to trim expenses across the board. The New York Post reports that the pay-cable channel will eliminate about 7% of its staff, cutting 150 jobs.
“While Turner Broadcasting and Warner Bros. have already announced significant layoffs, few expected the ax to fall on Time Warner’s ‘crown jewel,'” the story reports. “With hits like ‘Game of Thrones’ and ‘True Detective,’ HBO gets the royal treatment from pay-TV operators that hand over rich sums to carry its original programming. HBO is expected to hit them up for more money in the next round of negotiations.”
The report notes that HBO’s revenue was up 4% in 2013, to $4.9 billion, with adjusted operating income rising 8% to $1.7 billion.
“But HBO is preparing for tougher times — or, as the Stark clan would say in its popular fantasy series, ‘Winter is coming,'” the story notes. “HBO foresees a time when Internet-delivered options replace traditional cable TV. In a radical change, CEO Richard Plepler plans to launch a stand-alone HBO streaming service next year that doesn’t require a cable subscription.”
In a memo announcing the layoffs, Plepler wrote: “We reviewed 2015 budgets and staffing plans with this in mind and reduced cost and redundancy whereever possible to preserve our ability to invest in our future. This will unfortunately include the elimination of some positions.”
The specifics of which positions will be lost are expected this week.
Let me get this straight:
Revenues are up. Profits are up. So, naturally, 7% of the staff needs to be cut.
Oh, and by the way, we are introducing a new service, which will undoubtedly require new staff. So we’ll either hire younger, cheaper workers, or make the remaining staff work even harder. All so the stock price will go up.
God bless America.
I just went through this at a different Fortune 50 Company. It is the older and longer term employees that get cut. They make the most money and have the largest incentives and stock options. Eliminating them makes a huge difference financially. And I can tell you that there isn’t a big demand for 60-year0old marketing directors.