Sesame Workshop announces layoffs, citing federal funding and distribution limbo

Sesame Workshop, producer of the long-running children’s show Sesame Street, announced layoffs this week.

“Amid the changing media and funding landscape, we have made the difficult decision to reduce the size of our organization,” a spokesperson said in a statement. “These changes are necessary to ensure that the Workshop is poised to continue to deliver on its mission for years to come, but that does not make the human impact of these reductions any less painful. As production of our 56th Season begins next month, we remain as committed as ever to bringing Sesame Street to children and families for decades to come.”

Semafor editor Max Tani first shared news of the layoffs Wednesday in a post on X, formerly known as Twitter, that included an internal memo written by Sesame Workshop CEO Sherrie Westin. In the memo, Westin did not specify how many staffers are being laid off but said the organization must “downsize significantly and make what we hope will be temporary changes to our benefits and bonus program.” The Workshop spokesperson did not answer questions about how many employees were affected and in which departments.

Sesame Workshop’s decision comes as the organization searches for a “new distribution plan” for Sesame Street. The Workshop’s current contract with Warner Bros. Discovery, which owns Max and HBO, will end by 2027. Though other companies may emerge as partners, the gap between deals poses a financial challenge.

“Combined with the end of our current distribution deal and the policy changes affecting our federal funding, we’re confronted with a perfect storm,” Westin wrote. According to Sesame Workshop’s website, 4% of its budget comes from the federal government.

“These factors, among others, have left us with a significant budget gap that we must solve for as we head into the next fiscal year,” Westin said. The organization’s fiscal year 2023 990 form, the most recent available, showed a $5.3 million deficit.

The layoffs news comes a day after 200 employees, including early childhood education experts, fundraisers, facilities staff, producers and paralegals, announced their intent to seek union representation from the Office and Professional Employees International Union (OPEIU) Local 153. Writers at Sesame Workshop already have a union and reached a new agreement with management last year.