Warner Bros. Discovery plans to cut jobs and restructure HBO Max as earnings rise

Warner Bros. Discovery ( WBD ) has a lot of questions to answer ahead of its earnings report on Thursday.

The three-month-old streaming conglomerate, which is due to report its first quarterly earnings since the $43 billion merger, plans to shed 70 percent of its development business. according to The Wrapwhich cited “multiple insiders.”

The news has fueled speculation regarding the future of HBO Max with sources explaining The Wrap that CEO David Zaslav, known for his cost-cutting leadership style, will announce a major restructuring at both HBO Max and Discovery+ during or shortly after earnings results.

The outlet explained that the move “will result in an attrition of HBO Max, significant layoffs for its executives and staff to minimize layoffs with HBO and a combined streaming service with Discovery+.”

There will also be a harder line between scripted and unscripted content, the source says.

Shares were up 4.5% as the market closed on Wednesday, but were relatively flat in after-hours trading.

Earlier Wednesday, the studio confirmed that two films slated for release on HBO Max have been pulled: “The Batgirl,” starring “In The Heights” star Leslie Grace, as well as “Scoob!: Holiday Haunt”.

Warner Bros. did not immediately respond to Yahoo Finance’s request for comment on the layoff reports or his decision to pull those two films, but did provide a statement to CNN, which he owns.

“The decision not to release ‘Batgirl’ reflects the strategic shift in our leadership regarding the DC universe and HBO Max,” a Warner Bros. spokesperson told the network.

“Leslie Grace is an incredibly talented actress and this decision is not a reflection of her performance,” the statement continued. “We are incredibly grateful to the filmmakers of ‘Batgirl’ and ‘Scoob! Holiday Haunt’ and their respective casts and look forward to collaborating with everyone again in the near future.”

The story continues

The DC Comics film was almost finished and cost the studio a reported $70 million to produce

The news comes as the company looks to improve profitability and reallocate costs.

Warner Bros. Discovery previously said it expects to cut back Costs worth $3 billion over the next two years and spread those savings across streaming content.

Questions then turned to where these funds might come from; this could be the beginning of that effort.

Alexandra is a senior entertainment and food reporter at Yahoo Finance. Follow her on Twitter @alliecanal8193 and email her at alexandra.canal@yahoofinance.com

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About the Author: Chaz Cutler

My name is Chasity. I love to follow the stock market and financial news!