USA 
United Kingdom
Netflix’s Chief Global Affairs Officer has warned that a proposed Paramount Skydance acquisition involving Warner Bros. Discovery could result in significant job cuts, raising workforce concerns tied to merger synergies.
Speaking on Fox Business Network, Clete Williams described the potential workforce impact of consolidation in the entertainment sector while regulators review multiple transactions involving Warner Bros.
“Of course, the Department of Justice is going to investigate this transaction and make sure that it’s good for our economy and good for our consumers,” Williams said. “And my understanding is that they’ve sent similar inquiries about Paramount as well.”
Williams said Netflix is currently “engaging with state attorney generals.”
Merger synergies and job cuts
The debate centers on the scale of cost savings expected from competing deals involving Warner Bros. Discovery. Paramount Skydance has identified $6billion in synergies tied to its proposal involving Warner Bros. Discovery, while Netflix has acknowledged smaller savings tied to its own agreement.
“They have what we call the Noah’s Ark problem, which is, if they effectuate this deal, they’re going to have two of everything,” Williams said.
Williams argued that workforce reductions would represent the largest share of those savings.
“We’re tripling jobs, while Paramount has cut 3,500 jobs in recent years,” Williams said. “Paramount has identified $6 billion in synergies in the offer that they made, which is code for $6billion in job cuts.”
“And, quite frankly, we think it’s going to be even more than that, because this is going to be the largest leveraged buyout in history,” he continued. “And so they’re going to have to cut, cut, cut.”
Regulatory review and competing deals
Netflix’s agreement to purchase Warner Bros. for $83 billion remains under regulatory review in the US and internationally. The streaming giant said its own savings linked to synergies would come from operational efficiencies rather than workforce reductions.
Williams said Netflix’s savings due to synergies is “primarily from licensing fees and saving on things like that.”
“It’s not from job cuts,” he said.
The competing bid from Paramount Skydance has intensified attention on the workforce implications of consolidation across the media industry. Williams said the potential duplication of operations across companies could drive restructuring decisions.
Netflix entered into its agreement to purchase Warner Bros. in December in what became an all-cash deal valued at $83billion. Paramount Skydance’s David Ellison continues to pursue a competing transaction involving Warner Bros. Discovery.
