Warner Bros. Discovery (WBD) has cut 14% of its HBO Max workforce.
The company eliminated approximately 70 jobs across Casey Bloys’ organization after announcing that the streaming service will combine with Discovery+ to be one platform, set to launch next summer.
A new report from CNBC adds that the layoffs primarily impacted the division’s reality, casting and acquisitions departments.
No shows will be canceled as part of the job cuts, the report noted, although other impacted departments include business affairs, programming and production.
The layoffs, which analysts have described as "inevitable" after CEO David Zaslav announced plans to slash $3 billion worth of costs over the next two years, adds to the company's broader restructuring efforts.
Geetha Ranganathan, Bloomberg Intelligence senior media analyst, previously told Yahoo Finance that the combined service "makes sense" given the portfolio of assets with Discovery's content leaning more global and nonfiction, while HBO Max is comprised of more expensive, higher quality scripted programming.
She added that the decision also makes sense from a financial perspective given the duplicate management costs.
Combining the two entities "makes the product all the more robust — a must-have kind of service, which is exactly what their approach is going to be," the analyst predicted.
In the interim, the two services will share content. The company provided an update on its programming prior to the announcement, revealing that select content from Chip and Joanna Gaines' Magnolia Network will arrive on HBO Max in September. It will remain available on Discovery+, as well.
Additionally, CNN will receive its own hub on Discovery+ that will include original series like "Stanley Tucci: Searching for Italy" and "Anthony Bourdain: Parts Unknown."
The media giant reported a $3.42 billion loss in the second quarter, partly due to obstacles related to its recent merger.
It now expects 2022 adjusted EBITDA to come in between $9 billion and $9.5 billion, a decline from previous forecasts of $10 billion. Management also cut its full-year 2023 EBITDA guidance from $14 billion to $12 billion.
"This raises the question of what is the growth path for this company, because there's no imminent catalyst," Ranganathan warned.
She explained that the streaming business largely relies on future execution while the majority of the company's revenues remain tied in its legacy TV business — a risk as consumers cut the cord.
"The end of 2022 and into 2023 — it looks pretty bleak," the analyst continued.
Alexandra is a Senior Entertainment and Food Reporter at Yahoo Finance. Follow her on Twitter @alliecanal8193 and email her at firstname.lastname@example.org