Warner Bros. Discovery Begins Ad Sales Team Layoffs, Gives Upfront Update

Following its $43 billion merger in April, Warner Bros. Discovery has already taken several cost-cutting measures, with CEO David Zaslav looking to trim $3 billion from the two companies. Now, in the middle of the company's first combined upfront, the downsizing has reached the ad sales team. On Tuesday, The Information reported that Warner Bros. Discovery could cut up to 30% of its ad sales staff. Axios added to the report, releasing an internal Warner Bros. Discovery memo sent from ad sales chief Jon Steinlauf to U.S. staff, offering a "Voluntary Separation Program" to qualifying employees. The company had no comment on the layoffs; however, a source familiar with the situation confirmed the reports to Adweek, adding that the 30% staff cut isn't a hard number, but it is directionally correct. In addition, those cuts apply to the company globally, rather than just in the U.S. The cuts aren't entirely surprising as the newly formed company looks to remove redundancy from a combined WarnerMedia and Discovery sales force. Jon Steinlauf on How Warner Bros. Discovery Pulled Off Its First Upfront Presentation Steinlauf first spoke about potential ad sales layoffs at Adweek's Convergent TV Summit East event in April. “These companies have been through layoff after layoff, after merger, after integration, after spinoff. What we have in this organization is an all-star team at every level in every city,” Steinlauf said then. “The question really is how do you take two great sales organizations and make one great sales organization holding on to the best of the best.” According to Steinlauf, the ideal ad sales executive is a "team player" who puts the organization's needs about individual needs, network needs or smaller group needs. The ad sales chief added, “The most important thing is the power of the combined portfolio and the power of the combined ad sales organization. I’ve seen just about everything there is to see in cable ad sales. I really think of this as a merger of three great cable network groups. Throw an HBO Max and Discovery+ as the new babies, and we can do anything, we have everything, we can do anything.” At the time, Steinlauf said Warner Bros. Discovery was working to figure out the best organizational design and the company's internal needs. Steinlauf's memo to Warner Bros. Discovery employees echoes that, with the ad sales chief writing that he's not ready to unveil the organization's new structure just yet. Last month, ad sales chief also spoke with Adweek about the strategy of working with two different sales teams during the upfront. "The biggest thing is that we now can look at the entire portfolio of activity. We have teams now assigned to each of the major holding companies internally. And they’re analyzing the results of 2021-22 activities. What commitments were made to both portfolios when we were independent of each other. Now we’re blending all that together—and we’re trying to balance their investments," Steinlauf said at the time. An upfront update Steinlauf didn't mention the layoff reports while speaking at Credit Suisse's Communications Conference on Wednesday; however, the ad sales chief did offer an update about where the company's upfront negotiations are at, emphasizing the importance of Warner Bros. Discovery Premiere. This package gives advertisers a mix of the company's top shows across sports, lifestyle, entertainment and news. "We're active. We're negotiating. We're talking to everybody. We're closing deals. We're being patient. We have a different paradigm this year. The way we've chosen to go to market with Premiere is not the way advertisers normally buy mixes. This is a mix that consists of sports, entertainment, lifestyle news, some syndication," he said. "This is a process that requires more complexity than they've seen in the past. However, they really like what we're doing, because we've created a one stop shop for the best of Warner Bros. Discovery and all of these great brands." The ad sales chief wouldn't comment on the market or the company's pricing requests, even though rivals NBCUniversal, Paramount and Fox all confirmed during the Credit Suisse conference on Tuesday that they each were nearly done with upfront negotiations. In May, Steinlauf told Adweek that the Premiere package "is something that advertisers can embrace and say, 'This is much-needed supply at the top end of the business.' It’s more of a modern mix of primetime because it blends together different genres. But I think that’s necessary right now. We shouldn’t look at primetime as just being the entertainment on those four [broadcast networks]. It’s just too limited. We need to expand it."