AT&T Fires Hundreds Of DC, HBO Execs In Latest Example Of 'Merger Synergies'
from the Do-not-pass-go,-do-not-collect-$200 dept
This may be shocking to hear, but nearly all of the promises AT&T made in the lead up to its $86 billion merger with Time Warner wound up not being true.
The company’s promise that the deal wouldn’t result in price hikes for consumers? False. The company’s promise the deal wouldn’t result in higher prices for competitors needing access to essential AT&T content like HBO? False. AT&T’s promise they wouldn’t hide Time Warner content behind exclusivity paywalls? False. The “$15 TV service” the company repeatedly hyped as a byproduct of the deal? Already discontinued. The idea that the merger would somehow create more jobs at the company? False.
AT&T has laid off 41,000 employees just since it received its 2017, $42 billion tax cut from the Trump administration for doing absolutely nothing (technically, less than nothing, since it fired countless employees and trimmed 2020 CAPEX by around $3 billion). And this week, the company laid off another 600 employees across Time Warner, including employees at HBO and DC Comics:
“The moves are likely to cause anxiety at WarnerMedia, which has reorganized several areas of its business since being acquired by AT&T for about $85 billion in 2018. Since AT&T took over the company formerly known as Time Warner, top executives with years of oversight of distribution, programming and advertising sales have departed. Kilar?s ascension to the CEO role in May has only served to fuel more recalibration.”
Granted if you’ve watched the history of U.S. media and telecom consolidation, this should surprise nobody. The first year or two after such deals are usually filled with empty promises about how “nothing will change” (AT&T brass repeatedly promised Time Warner employees they would have ample resources and creative freedom), only to be followed up by everything changing, and, as is the case when a lumbering telecom monopoly jumps more fully into a creative business it doesn’t fully understand, often not for the better.
And while AT&T has hinted that much of this had to do with COVID-19, that’s not the case. Most of these moves were either planned for some time, or part of the company’s ongoing attempts to shed the massive debt accumulated from the company’s spending spree on DirecTV (2015) and Time Warner (2018). Both mergers were supposed to position AT&T as a dominant player in the online video and advertising space. Instead, AT&T has been losing paying TV customers hand over fist after a number of bungled decisions ranging from price hikes on price sensitive cord cutters to bungled streaming branding.
It was yet another example of the perils of a “growth for growth’s sake” mindset, blended with yet another example of how lumbering, government-pampered telecom monopolies like AT&T and Verizon just aren’t very good at this whole competition and innovation thing.
AT&T’s repeated missteps were bad enough that they resulted in an investor backlash, the “retirement” of former AT&T CEO Randall Stephenson, and a newfound focus on firing more people than ever to recover debt. As is often the case, lower and mid-level management has to pay the cost for years of higher level managerial dysfunction. As is also often the case, the majority of press outlets that were eager to parrot AT&T’s pre-merger promises are utterly absent when it comes time to tally the human cost of mindless merger mania.