According to people familiar with the situation, DirecTV is letting off hundreds of employees — around 10% of its higher ranks — as the firm seeks to slash expenses amid the heightened pain of cord cutting for pay-TV providers.
According to the persons, the most of the job cutbacks would be at the management level, citing an email given to employees on Friday. According to one of the sources, managers account for around half of DirecTV’s fewer than 10,000 employees. The impacted employees will be laid off on January 20.
AT&T signed into a contract with private-equity firm TPG to spin off DirecTV and its affiliated businesses in 2021, with an expected enterprise value of $16.5 billion at the time. AT&T paid $48.5 billion for DirecTV in 2015, including debt assumption.
DirecTV and its competitors have long faced pressure as customers cut the cord and switch to streaming services. According to MoffettNathanson, the pace of cord cutting surged in the third quarter.
Satellite TV providers, particularly DirecTV and Dish, have had some of the biggest pay-TV customer losses in recent years. While DirecTV no longer officially announces its subscriber base, according to analyst reports and one of the persons familiar with the job cutbacks, the firm has approximately 13 million consumers.
According to ratings firm Fitch, DirecTV lost roughly 500,000 customers in the most recent quarter. According to MoffettNathanson, although DirecTV’s losses reduced during the peak of the pandemic, they subsequently surged to roughly 17%.
Aside from satellite television, the business now provides DirecTV Stream, an internet-TV bundle akin to Google’s YouTube TV and Dish’s Sling.
Broadband and fixed wireless firms are expanding their networks in rural areas where satellite TV providers were formerly the sole TV suppliers.
Meanwhile, the cost of carrying broadcast and cable channels is increasing. Rising prices, according to executives throughout the sector, have contributed to the acceleration of pay-TV client losses in recent years.
Furthermore, media firms have begun to offer more of the material typically available on linear TV, such as weekly series, live events, and sports, on streaming platforms, hence increasing the value of the pay-TV bundle.
