Stephens: WarnerMedia Restructuring a ‘Refocusing’

AT&T chief financial officer John Stephens said layoffs and management changes at its WarnerMedia unit are a “refocusing” at the content division, and not because of “needed" adjustments at its new streaming service HBO Max.

WarnerMedia launched HBO Max on May 27 to a fairly tepid response -- about 87,000 downloads of its mobile app on Android and iOS devices on its first day, compared to 10 million for rival Disney Plus. Later the parent company claimed 4.1 million people activated the streaming service after its launch. 

But last week WarnerMedia underwent a massive management shakeup, with WarnerMedia Entertainment and Direct to Consumer chairman Bob Greenblatt and HBO Max chief content officer Kevin Reilly ousted among a flurry of other executives. In addition, reports surfaced Monday WarnerMedia would lay off about 600 workers across its HBO, Turner and Warner Bros. divisions. 

The moves come a few months after AT&T said it named former Hulu founder Jason Kilar as CEO of WarnerMedia, replacing John Stankey, who at the time was promoted to president and chief operating officer of AT&T. Stankey was named AT&T CEO in July. 

Other media giants are preparing to streamline their streaming businesses as well. NBCUniversal said earlier this month that it will reorganize its TV and streaming units. 

At the virtual Oppenheimer Technology, Internet & Communications Conference Tuesday,  Stephens said that the changes at WarnerMedia was an effort to “super hyper-focus” its management around its direct-to-consumer efforts, allowing all groups within WarnerMedia to “speak with one voice.”

Stephens acknowledged the restructuring also would reduce costs, allowing for a streamlining of back office and support functions, but added that WarnerMedia would invest those savings “into continuing to provide the best content out there.”

“I view it as more of a refocusing of the company,” Stephens continued, adding that the changes should be seen as a “transformation of making things better, not because we needed to adjust anything, but rather because we’re striving to get even better than the launch was…”