A DirecTV technician at an apartment building in Lynwood, Calif.
Patrick T. Fallon | Bloomberg | beautiful pictures
DirecTV is laying off staff – about 10% of its superiors – as the company seeks to reduce costs amid an increasingly difficult time for pay-TV providers to cut the cord, according to people familiar with the matter. this.
Most of the job cuts will be at the management level, these people said, citing an email to employees sent on Friday. Managers make up about half of DirecTV’s fewer than 10,000 employees, one person said. The last day for affected employees will be January 20.
A DirecTV spokesperson said in a statement: “The entire pay-TV industry is impacted by the long-term decline and increasing rates of security and program distribution.” “We are adjusting our operating costs to accommodate these changes and will continue to invest in new entertainment products and service improvements.”
DirecTV becomes a private company in 2021 when AT&T signed an agreement with TPG . private joint stock company to remove DirecTV and its related businesses, with an implied business value of $16.5 billion at the time. AT&T acquired DirecTV in 2015 for $48.5 billion and assumed debt.
DirecTV and its peers have long been under pressure as customers cut the cord and opt for streaming services. According to MoffettNathanson, the rate of cord cutting only accelerated in the third quarter.
Satellite TV providers such as DirecTV and Dish in particular has seen some of the highest pay TV subscriber losses in recent years. While DirecTV no longer publicly reports its subscriber base, the company has about 13 million customers, as reported by analysts and one of the people familiar with the job cuts.
DirecTV is said to have lost about 500,000 customers in the most recent quarter, according to ratings agency Fitch. According to MoffettNathanson, although DirecTV’s losses slowed during the height of the pandemic, it has recently accelerated to a loss of nearly 17%.
In addition to satellite TV, the company also offers DirecTV Stream, an internet-TV package similar to by Google YouTube TV and Dish’s Sling.
Competition has increased in rural areas as fixed-line and broadband companies build networks in areas where satellite TV providers were once among the only TV providers. .
Meanwhile, fees for the implementation of television and cable channels continue to increase. Executives across the industry have cited the increase in fees as part of the reason for the accelerated rate of loss of pay-TV customers in recent years.
In addition, media companies have been offering more traditional content on linear television, such as weekly programs, live events and sports, on streaming services, continue to draw value from the pay TV package.
DirecTV’s contract recently ended for the rights to NFL’s “Sunday Ticket” Sunday game pack out of the market. It has held the rights since starting “Sunday Tickets” in 1994 and has lost about $500 million annually on the package, CNBC previously reported.
The layoffs include only a small fraction of employees involved in Sunday Ticket, the people said.
