Paula Bernstein and Jill Goldsmith of Variety report on massive job cuts at Time Warner as a result of its merger with America Online, said to be the biggest reduction in the history of Time Warner.
Here is an excerpt from their article.
AOL Time Warner moved Tuesday to demystify its cost-cutting plans, clarifying and quantifying, division by division, a total of about 2,400 job cuts — about 3% of the newly merged company’s total work force.
An additional 3,800 positions may well be lost as the company pursues plans to sell or shutter its Warner Bros. retail stores; an outright sale may keep some of the staff in place. Time Warner has been shopping the stores, but nothing is imminent.
“In no area are we cutting into the muscle of the company. We need that muscle to grow and compete,” insisted AOL Time Warner spokesman Ed Adler.
AOL Time Warner plans to announce the layoffs today, along with news that it’s revamping its compensation structure and awarding stock options to just about all employees in a one-time grant. Division heads and other executives will receive less of their paycheck in cash and more in stock options.
The Warner Bros. studio has emerged unscathed except for about 100 positions at Entertaindom.com, an Internet portal that will be melded into Warner Bros.’ other Web sites. New Line Cinema, however, is taking a big hit, with 100 of its 600 staffers laid off and a mandate to make lower-budget pics.
The cuts are likely to be especially tough on the marketing side, homevideo and at subsid Fine Line, whose New York office may be shuttered, insiders said. New Line production prexy Michael De Luca was ousted last week.
His replacement, Toby Emmerich, is holding a series of meetings this week to decide who will be let go on the production side. These are New Line’s first significant cutbacks after a period of strong growth starting back in 1993, when Ted Turner bought the studio.
Senior exec veep Richard Saperstein, exec veep of production Claire Rudnick-Polstein, exec veep Lynn Harris, as well as production execs Brian Hickel and Cindy Guidry, are among the execs who will likely depart. Saperstein may segue into a producer deal with the company.
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