After announcing the departure of CEO Christina Spade, AMC Networks chairman James Dolan sent a memo to staff warning the company was planning to make "large scale" layoffs and other cuts to operations.
In his memo Dolan cited the difficulties faced by the pay-TV industry and the fact that streaming has not yet replaced the revenues being lost by the traditional cable networks that make up the bulk of AMC's business. AMC has confirmed reports that the layoffs could amount to 20% of the company's work force which totals about 1,000 employees.
"As I am sure you are aware our industry has been under pressure from growing subscriber losses. This is primarily due to 'cord cutting.' At the same time we have seen the rise of direct to consumer streaming apps including our own AMC Plus," Dolan said. "It was our belief that cord cutting losses would be offset by gains in streaming. This has not been the case. We are primarily a content company and the mechanisms for the monetization of content are in disarray."
Dolan said that he and the AMC board have decided the company needs to conserve its resources.
"We have directed the executive leadership of AMC Networks to undergo significant cutbacks in operations. These will include a large-scale layoff as well as cuts to every operating area of AMC Networks," Dolan said. "We of course realize that this will cause significant concern and anxiety for our employees and those who rely on AMC Networks for their livelihood. We do not take this lightly. We will take every step possible to minimize the impact of these actions on our community. However, it is imperative that we begin immediately with this new course of action."
Dolan said details of the cuts would be communicated in the near future.
In the third quarter, AMC’s net income dropped to $84.7 million from $110.7 million a year ago. Revenue fell 16% to $682.1 million. Advertising revenue was down 16% to $407 million.
In midday trading AMC Networks shares were down more than 5% to $19.40, down from a 52-week high of $44.66.
AMC Networks management has been in flux for a while. Josh Sapan, who had been CEO of the company for 26 years stepped down in August 2021 and became executive vice chairman. A number of other senior AMC executives have left the company as well.
Sapan was succeeded on an interim basis by former Showtime head Matt Blank. Christina Spade, who had joined the company as CFO from CBS and Showtime, was named CEO in August. ■
