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AT&T moves forward with job cuts at WarnerMedia

More than 1,000 people are expected to lose their jobs within the entertainment division on the phone company.

More than 1,000 people are expected to lose their jobs within the entertainment division on the phone company.

(Image: AT&T/Graphic: The Desk)

More than 1,000 people are expected to lose their jobs at AT&T this week, according to a memo sent to some employees on Tuesday.

The move will leave hundreds of workers at AT&T’s WarnerMedia division wondering where their next paycheck will come from at the start of the holiday season.

“Today, we have arrived at a number of difficult decisions that are resulting in a smaller WarnerMedia team,” Jason Kilar, the chief executive of WarnerMedia, aid in the email. “Nothing about this is easy.”

Kilar said the job cuts were not a reflection of the work ethic of any individual employee but instead represented what the company felt was best as it moves into 2021.

“It is simply a function of the changes I believe we must make in order to best serve customers,” Kilar wrote.

The move comes after AT&T eliminated 600 positions within the same division three months ago. Economic turbulence brought on by the novel coronavirus has been largely cited by company executives for the job losses.

AT&T is certainly not the only company that has experienced its share of economic problems during the pandemic: the Walt Disney Company, Comcast’s NBC Universal and Fox Corporation have all implemented their own employee reductions to offset revenue losses over the last few months.

But other factors are likely to blame for AT&T’s problems, too — ones that have nothing to do with the health pandemic — including AT&T’s decision to acquire satellite service DirecTV several years ago and its botched rollout of HBO Max in May.

AT&T has yet to see the return on its $49 billion purchase of DirecTV five years ago. Instead, the satellite TV company has shed subscribers as customers flee for cheaper streaming options.

AT&T offers two streaming TV services — the standalone AT&T TV Now and a cable-like Internet-based service called AT&T TV — but neither have been able to cover the loss experienced by DirecTV. Underwhelming channel selections and features coupled with expensive per-month subscription price have driven customers to cheaper alternatives.

Things haven’t fared much better for HBO Max, a streaming service that AT&T had hoped would help turn around the entertainment division at the company. It launched with much fanfare in late May but wasn’t immediately available on Roku or Amazon Fire TV devices, which are used by 70 percent of streaming TV households.

Despite the layoffs in August and the fresh round expected within the next week or so — job cuts that could total well above 1,500, according to at least one report — AT&T’s chief executive John Stankey has repeatedly assured investors and the public that he’s happy with where things are at the company.