Skydance has become the latest, and perhaps most vocal, major Hollywood studio to explain how it plans to use AI to reduce costs. After the acquisition of Warner Bros. Discovery for $111 billion last month, the company has $87 billion in debt and is looking to cut expenses.
On Monday, Skydance outlined plans to save at least $6 billion a year within three years, with AI playing a key role in everything from office work to computer programming to film production. “Growing our business and repaying debt are our top priorities,” the company told its shareholders.
In a letter to shareholders and a subsequent earnings conference call, executives explained where the savings would come from:
- Corporate operations: $2.2 billion. Consolidate departments, eliminate overlapping jobs, reduce office space and use AI for administrative work.
- Technology: $1.4 billion. Combine streaming and computing systems, merge technical teams and use AI coding tools.
- Marketing: $1 billion. Combine advertising campaigns and reduce promotional expenses.
- External contractors and suppliers: $1.4 billion. Work with fewer suppliers and negotiate cheaper contracts.
These are annual savings that Skydance hopes to achieve within three years, not $6 billion in total reductions. The company did not say how much AI would help or how much it hoped to save on labor. Ellison also noted that potential savings from AI in film production are not yet included in the company’s forecasts.
And the cinema? CEO David Ellison said AI would make production faster and cheaper, while insisting that “artificial intelligence is a tool for artists and will never replace them.”
At the same time, Ellison predicts that AI could transform filmmaking more radically than CGI and digital compositing did in the 1990s, adding that “every discipline in the business will use these tools and productivity will improve.”
Ellison argued that lower production costs could encourage studios to take more risks on original films. But that raises an obvious question for artists: If studios can create the same content faster and cheaper, what happens to the people currently doing that work?
The cuts are already underway. Skydance has proposed employee buyouts and this week confirmed layoffs in its gaming division, where at least 25 workers reportedly lost their jobs. On Monday, James Gunn and Peter Safran were also removed as heads of DC Studios, with Variety reporting that disappointing returns from expensive projects contributed to their ouster.
Skydance did not specify which production jobs AI could affect or how many of them could disappear. But the company’s message to investors is clear: it intends to spend much less money to run its business and produce films and series, and AI is a key factor in achieving this.
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