Being in the business of making other people happy, unfortunately, doesn’t guarantee you get to enjoy the same luxuries all the time. The producers of Sesame Street have announced layoffs in 2025, and the company will soon be forced to bring down its numbers to stay afloat. Earlier this month, President and CEO Sherrie Rollins Westin indicated the need for significant downsizing due to financial pressures, which are typically the leading cause of such decisions.
The Sesame Workshop layoffs were announced shortly after workers came out and declared their intent to unionize with the Office and Professional Employees International Union (OPEIU) on March 4, 2025. This timing has raised concerns about possible union-busting efforts however, there is no concrete evidence to verify this.
The Sesame Street layoffs are disappointing to see but all hope is not lost for the non-profit at the heart of the story. (Image: Pexels)
Sesame Street Layoffs Announced for 2025: Big Bird Is Forced To Drop the Smile
On March 5, 2024, President Westin shared a note with staff indicating that Sesame Workshop will “downsize significantly.” The email explained that Sesame Workshop was not immune to the economic challenges inherent to the drastically changing media landscape.
Due to the end of the company’s current distribution deal and the policy changes that have affected its federal funding, the team has been placed in a difficult position with a budget gap that has to be bridged for the next fiscal year.
Employees affected by the Sesame Street layoffs were informed the next day after the email was sent out, and the rest were asked to join a department meeting later in the week to prepare for the changes coming at the organization.
Why Is Sesame Workshop Facing Funding Cuts
The hold that Sesame Street held on many of us as children has weakened significantly over the years. Children are no longer enthralled by the realistic anthropomorphic creatures but have instead to other, more colorful and addictive dogs and pigs. Bluey, Peppa Pig, and the Children of Cocomelon are the latest sensations. With the waning audience numbers for the show, HBO Max cut the funding it was providing to the show until recently, with plans to stop streaming the show in 2026.
HBO’s $35 million annual contribution to Sesame Workshop helped the studio keep its productions running while also allowing the show to stream on the Max catalogue before coming to PBS. The Max-related Sesame Street budget cuts are only one part of the funding problem.
Around 4% of Sesame Workshop’s budget comes from the federal government, and cuts to the United States Agency for International Development (USAID) have also put an end to the grants the nonprofit used to receive. The effect of the government cuts has been far-reaching but children are repeatedly losing on every front as a result.
What’s This News About a Sesame Workshop Union?
The Sesame Workshop layoffs that have been announced came a day after 200 workers voiced their desire to unionize. An expansive cross-section of staff members, from paralegals to early childhood education experts, at the company made a statement regarding the decision to form a union with the Office and Professional Employees International Union (OPEIU) Local 153.
“Sesame Street has taught generations the importance of kindness, fairness, and standing up for what’s right. As the dedicated staff behind this beloved show and so much more, we believe Sesame Workshop should embody those same values by ensuring all workers have a voice in the decisions that affect us. By coming together, we believe we can build a stronger, more supportive workplace that embodies the crucial lessons we teach the world’s children every day.”
—Phoebe Gilpin, Senior Director of Formal Learning.
These workers wanted a bigger say in the decisions that affected their roles, particularly in relation to job security and fair pay. The statement explained that the cast, crew, and writers of the show had already unionized but now, those in the administrative offices also felt their interests needed to be represented collectively.
Are the Sesame Workshop Layoffs an Attempt at Suppressing the Union?
Only a day after this announcement, the Sesame Street layoffs were announced, sparking questions of a quick union-busting plan at a time when the company was already too preoccupied with funding to deal with the problems of the staff.
As of now, there is no evidence to suggest that the layoffs were announced to suppress any opportunity for the workers to consolidate their union powers. We do not yet know if the members who elected to join the union were primarily targeted by the layoffs, but it seems likely. There are no recent reports on the Sesame Workshop union and what changes have been made since the union efforts were announced, but we’ll add an update when we know more.
The Sesame Street Job Cuts and the Impact on Workers
In the email to workers, the CEO explained that the company’s largest expense currently was its people and the benefits provided to them. As a result, the company will have to downsize and make changes to its benefits and bonus program. This means that employees who choose to—or are asked to—stay will also be impacted by Sesame Workshop’s funding cuts.
There are no details available on the compensation being offered to workers who are laid off or the extent to which the cuts to the bonus program will affect workers but we do expect a significant impact on the employees who will have to work under greater pressure to compensate for the existing coworkers.
What’s Next For Sesame Workshop?
The 55-year-old children’s television show has been loved wholeheartedly over the years and has always been applauded as a very helpful aid to development among children. Despite the laurels of its past, the show is now seen struggling to stay on the air as it looks for other streaming partners who may volunteer to close the gap that HBO Max’s budget cuts for Sesame Street left behind.
The current episodes of Sesame Street will continue to air on HBO Max through 2027 to fulfill the 10-year deal that was agreed upon by both parties. Production for Season 56 is set to begin next month, but where the show will go next and how it will continue to receive funding remains unclear.
The show will also undergo changes and end its “magazine”-style format for a different approach to the show and could be paired with a new animated series called Tales From 123. Will this be enough to keep the show on the air for another decade? Only time will tell. The scale of the Sesame Street layoffs and the impact of the job cut on workers also remains to be seen.
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