FX168 Financial News (North America) News On Tuesday (November 29), AMC Networks said it plans to lay off about 20% of its US workforce, in a sign of further confusion at the company, which announced earlier Tuesday that its chief executive He resigned after less than three months in the position.
“We have determined at this time that we need to conserve resources, which will include operating cuts, which unfortunately include mass layoffs affecting nearly 20 percent of the US workforce,” the entertainment company said Tuesday. AMC said it employs about 1,000 people. US employees.
The planned layoffs come as AMC, home to many hit shows over the past 15 years, including “Mad Men” and “Breaking Bad,” struggles to generate enough revenue from the streaming service to make up for it. The impact of declining cable business, as Americans cancel pay-TV packages.
head of AMCJames Dolan In a previous memo to employees, she said, “We believe that losses from the cable TV business will be offset by gains from streaming media. But when the Wall Street Journal reviewed the memo, it said: ‘The situation is not right. ‘” “
James Dolan said the board has directed AMC’s executive leadership to make significant business cuts. Earlier Tuesday, AMC said that CEO Christina Spade had resigned. The company said it had been fired without cause and that its board was finalizing the task of naming a successor.
AMC Networks’ brands include its namesake channel, as well as IFC, WE tv, and Sundance TV. It was also one of many media companies of the year that ushered in a historic wave of growth as cable television took its dominant position in the media ecosystem. Several high-quality series helped AMC usher in the television era.
As a “minor fish” surrounded by much larger media companies, AMC is not well-positioned to compete with streaming giants like Netflix Inc. and Amazon.com Inc. Even big companies like The Walt Disney Company, Warner Bros. Discovery Company, and Paramount Universal that have marshalled resources in the streaming wars have struggled to find a path to profitability.
“The mechanics of content fee marketing are messy,” James Dolan said in his note. It’s important to note here that AMC has nothing to do with theater chain AMC Entertainment Holdings Inc, whose shares closed down 5.3% on Tuesday. The stock is down 43% so far this year.
Disney, which lost its streaming business nearly $1.5 billion in the most recent quarter alone, fired CEO Robert Chapek earlier this month and put his predecessor Robert Iger back at the helm.
David Zaslav, CEO of Warner Bros. Discovery (whose assets include HBO Max, Discovery, the Warner Bros. movie studio, and cable channels TNT, Food Network, HBO, and CNN), recently stated that profitability, not streaming subscribers, would be the criterion for the company’s success. “I think the great experiment of chasing subscribers at any cost is over.”
A decade ago, AMC embraced the rise of streaming services. Ratings for one of its most-watched shows, “Breaking Bad,” improved after previous seasons of the series aired on Netflix Inc. , indicating that the relationship between the cable network and the broadcast service may be mutually beneficial. This dynamic changed when streamers started embracing original content and the number of streaming platforms exploded.
In recent years, AMC has entered the streaming space with its own services, including AMC. The company continues to license its software to other platforms. In the US, recent seasons of high-profile shows including “Better Call Saul” and “The Walking Dead” are available exclusively through AMC for $8.99 per month for a limited time.
In a memo to employees, James Dolan said he and the AMC board of directors recognized the layoffs would cause significant concern and anxiety among employees. We will not take this lightly, but we must begin this new course of action immediately. “
Outgoing CEO, Christina Spade, has held senior positions at ViacomCBS Inc. and CBS Corp. and Showtime. She joined AMC in January 2021 as Chief Financial Officer and has been Chief Operating Officer for about a year.
“We thank Christina for her contribution to the company prior to her tenure as CEO and Chief Financial Officer, and we wish her all the best in her future endeavors,” James Dolan said in a statement earlier Tuesday.
Christina Spade became CEO on September 9, succeeding Matthew Blank, former president of Showtime Networks and senior advisor to investment bank Raine Group LLC. Matthew Blank will take over as interim CEO from September 2021.
Josh Saban stepped down last year as CEO of AMC Networks after 26 years during which he spearheaded a number of hit TV shows and AMC’s foray into broadcast video.
AMC Networks said in a securities filing that Christina Speed will receive a severance package detailed in an employment agreement she signed on Aug. 4 and was set to expire on Dec. 31, 2025. The company said she would receive the benefits described, regardless of whether she was fired without cause. Or you quit for a good reason. Under the terms of the employment agreement, Ms. Christina Speed will receive more than $10 million in severance payments, plus benefits related to restricted stock units and other bonuses.
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