Warner Bros. Discovery says it's worried employees will quit if it picks Paramount's offer

• Warner Bros. Discovery says it still has reservations about Paramount Skydance's offer.
• WBD says employees may leave in the deal's pre-closing period if it chooses Paramount over Netflix.
• Paramount has said it plans to generate $6 billion in cost savings through the merger.

Warner Bros. Discovery says it's worried there could be an exodus of employees if David Ellison's Paramount Skydance beats out Netflix for control of the company.

Paramount has promised investors big cost savings — and WBD says employees may not stick around to find out whether their jobs are safe.

In the past few weeks, Paramount has addressed many of the issues WBD's board had with its bid, but this one has stuck around.

"WBD may experience more substantial losses of employees and talent during the pre-closing period" if it picked Paramount's bid over Netflix's, the WBD board of directors wrote in an SEC filing released on Tuesday morning. It flagged the same issue in a January filing.

Although WBD chose Netflix's acquisition offer for its studio and HBO assets, the company is formally giving Paramount one more chance to raise its bid for the entire company, after nine previous offers.

Paramount has promised investors $6 billion in so-called "synergies," or cost savings, if it were to buy all of WBD. WBD's board said those efficiencies are "likely to come from workforce/headcount reductions," especially "given the overlapping nature of the studio, streaming and linear networks businesses" of Paramount and WBD.

"Where do you think synergies come from? Cutting jobs," Netflix co-CEO Ted Sarandos said at the UBS media conference in mid-December.

Netflix has told shareholders it expects to save between $2 billion and $3 billion if it wins and takes over assets that include HBO, HBO Max, and WBD's studio. While the streaming giant may also lay off staffers, it says much of its savings would come from the licensing costs it would no longer have to pay out to WBD.

"We're not cutting jobs — we're making jobs," Sarandos said at the UBS conference.

A Paramount spokesperson declined to comment.

Netflix's winning bid was $27.75 per share for the most valuable parts of WBD, while Paramount insists its $30-per-share proposal for the whole company, including WBD's cable networks, is a better deal.

Both bids are all cash, so the tug of war may come down to how much WBD's TV networks are worth — and how high Paramount bids.