AMC Networks is planning "large-scale layoffs," as the entertainment company's new chief executive officer steps down. Image courtesy of amc networks
Nov. 29 (UPI) -- AMC Networks is planning "large-scale layoffs," according to a memo sent to staff on Tuesday, the same day the entertainment company's new chief executive officer stepped down after less than three months on the job.
In the memo, AMC parent company MSG Entertainment CEO James Dolan said the decision to layoff employees comes after significant subscriber losses due to the cancellation of cable bundles in favor of streaming, or cord-cutting, CNBC and Yahoo! News reported.
"It was our belief that cord-cutting losses would be offset by gains in streaming. This was not the case," Dolan said in the memo. "We are primarily a content company and the mechanisms for the monetization of content are in disarray."
"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," he said.
The global entertainment company pulls half of its revenue from the linear TV bundle, which has been losing customers to streaming services. In the period ended Sept. 30, AMC Network's quarterly revenue had fallen 16% to $682 million.
AMC Networks shares were down more than 4% at the close on Tuesday.
"We have determined we need to conserve resources at this time," AMC Networks said Tuesday. "This will involve cutbacks in operations, which unfortunately includes a large-scale layoff, impacting approximately 20% of our employees in the U.S.," the company said.
As of the end of last year, AMC Networks had more than 1,700 full-time employees and 278 part-time staff.
The memo regarding impending layoffs was sent to AMC Networks staff right after the company announced that Christina Spade would leave her role as CEO.
"We thank Christina for her contributions to the company in her CEO role and her earlier CFO role, and we wish her well in her future endeavors," Dolan said in a statement Tuesday.
Spade joined AMC Networks in 2021 as chief financial officer and was promoted to the dual role of chief operating officer a few months later. In less than a year, she was promoted to CEO.
The company said its board is finalizing its decision on Spade's replacement.