High anxiety in Hollywood: “Everyone is completely drained and burned out.”

Then WarnerMedia CEO Jason Kilar announced in April that he would leave the company after its merger with Discovery was completed, he promised to gift employees with photos he had taken during his frequent walks around Warner Bros. Studios lot. At the time, the workforce that Kilar had led through the pandemic was largely optimistic about the future under new leadership David Zaslav, partly because the $43 billion deal he made would move the company out of telecom giant AT&T. Here was an executive who had worked in entertainment for decades and had even bought the Beverly Hills home once owned by the late Robert Evans.

But when Kilar’s gifts—including pictures of the studio’s iconic water tower, accompanied by a note praising his “talented, world-class team”—made their way to employees’ mailboxes earlier this month, the tenor had changed, according to interviews with several insiders. In his first few months as CEO of new giant Warner Bros. Discovery, Zaslav – or DZ, as he is known to staff – has installed many of his most loyal Discovery lieutenants at the top of the company, leaving senior WarnerMedia executives with little choice but to look for jobs elsewhere. He’s also made quick work of his promise to cut the company’s $50 billion-plus in debt and shelve DC movies bat girl, is pulling little-watched series and movies from HBO Max, beginning a series of rolling layoffs that insiders expect will continue through the end of the year.

Zaslav has pledged to prioritize theatrical releases for Warner Bros. films and focus on fiscal responsibility over streaming growth, but investors are skeptical so far: The company’s stock has lost more than 50% of its value since the merger closed. And even as Zaslav plans to hire a new executive to shepherd the next era of DC superhero movies — and is preparing to merge Discovery+ and HBO Max into one superservice next year — a company executive says optimism is no longer trickling down to employees , who are struggling with low morale and jittery nerves due to the expected layoffs. “The future doesn’t feel important,” says the boss. “Everyone is totally drained and feeling burnt out.”

Of course, all of Hollywood is feeling excited at the moment. The city seemed to emerge from the pandemic’s nightmarish uncertainty until Netflix’s subscriber losses in early 2022 forced every major company to question whether the expensive win-at-all-costs mindset that had guided the streaming wars still paid off meaning – or ever did. . Suddenly, the former Wall Street darling was firing people and executives touting their reined-in spending. And it was Before fears of a recession increased.

Former Disney CEO Bob Iger couldn’t help but notice the tremor in the air as he sat down for an interview with Kara Swisher at the recent Code Conference gathering of media and technology executives and politicians. “Right now, in media and entertainment, is an age of great anxiety,” said Iger, his laid-back demeanor and retirement stubble no doubt making some executives in the audience jealous. “People who run these big companies are anxious. Even streaming companies are anxious. Investors are anxious. Advertisers are anxious. The creative community is anxious. Agents are anxious. Everyone is anxious. They’re anxious because this is an era of great transformation, and there are still a lot of unknowns.”

These unknowns are particularly evident at Warner Bros. Discovery, where insiders say they have felt unmoored while waiting for clear guidance from executives. The new regime is still in the midst of merging two companies — which together have about 40,000 employees — with diverse portfolios of entertainment assets, including HBO, CNN, Warner Bros. Studios, Animal Planet, TLC, HGTV and the Oprah Winfrey Network, among other properties. For Warner Bros. employees who have survived the merger so far, it’s been a period of particular “whiplash,” according to the executive, as Zaslav and his team very publicly reverse the streaming-first business strategy laid out by Kilar.

Except for a few bright moments – the hiring of veteran film executives Michael DeLuca and Pamela Abdy to run the movie studio and lock up the HBO boss Casey Bloys into a new five-year contract, and a tour de force showing at the Emmys — the one Warner Bros. Discovery management has focused on is the unpleasant cost-cutting that comes with large mergers. In addition to shelving Batgirl and removal from HBO Max titles such as the HBO drama series Vinyl and Robert Zemeckis movie remake the witches, Zaslav has also shut down fledgling streamer CNN+, killing off an ambitious (and expensive) series in development JJ Abrams, and largely scrapped plans to air scripted programming on basic cable networks TNT and TBS going forward. There has also been a steady trickle of layoffs, including about 70 people who worked for HBO Max, particularly those on the reality and live-action family programming teams, and about 100 ad sales executives. “He’s a slash-and-burn guy,” a top talent rep says of Zaslav, who built a reputation at Discovery for running a lean operation.

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