As Cord-cutting Accelerates, DirecTV Lays Off Hundreds of Managers
- DirecTV is laying off hundreds of employees — roughly 10% of its upper ranks — as the company looks to reduce costs, according to people familiar with the matter.
- One source said that DirecTV employs about half its employees in managers.
- Cord cutting is a key factor in cost reduction, particularly at satellite TV distributors like DirecTV.
DirecTV is laying off hundreds of employees — roughly 10% of its upper ranks — as the company looks to reduce costs amid the heightened pain of cord cutting for pay-TV providers, according to people familiar with the matter.
According to people, most job cuts will occur at the manager level. This was according to an email sent Friday to employees. According to one person, managers account for about half of DirecTV’s 10,000-plus employees. January 20 will mark the end of employment for affected employees.
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“The entire pay-TV industry is impacted by the secular decline and the increasing rates to secure and distribute programming,” A spokesperson for DirecTV stated this in a statement. “We’re adjusting our operations costs to align with these changes and will continue to invest in new entertainment products and service enhancements.”
In 2021 DirecTV was made a private corporation. AT&T TPG, a private equity firm, entered into an agreement Spin off DirecTV, and related businessesThe implied enterprise value at that time was $16.5 billion. AT&T bought DirecTV in 2015, for $48.5 million and the assumption debt.
DirecTV has been under severe pressure from customers who have cut the cord to switch to streaming services. According to MoffettNathanson, the rate of cord cutting increased in the third quarter.
Satellite TV providers, such as DirecTV Dish These areas have experienced the largest pay-TV subscriber loss in recent years. DirecTV does not publicly report its subscriber base. However, it has approximately 13 million customers according to analyst reports. One person who is familiar with the situation said that the company did not publish this number.
According to Fitch, DirecTV lost approximately 500,000 customers during its most recent quarter. According to MoffettNathanson, DirecTV lost almost 17% of its customers in the most recent quarter, despite slowing losses during the pandemic.
The company offers satellite TV as well as DirecTV Stream which is an internet-TV bundle that’s similar to Google’s YouTube TV and Dish’s Sling.
As fixed and broadband companies establish networks in remote areas, where satellite TV providers used to be the only providers of TV, competition has increased in rural areas.
Fees to broadcast and cable channels are on the rise. Pay-TV customer losses have been increasing in recent years due to rising fees, according to executives from the industry.
Media companies are offering more content on streaming services than is available on linear TV. This adds value to the pay-TV bundle.
DirecTV has terminated their contract with DirecTV for the rights. The NFL “Sunday Ticket” package of out-of market Sunday games Since the inception of the company, it has held these rights. “Sunday Ticket” The package was worth approximately $500 million annually in 1994. CNBC reported previously.
These layoffs will affect a very small number of employees who are directly or indirectly involved with the company. “Sunday Ticket,” They said it.
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