CNBC is reporting that Entertainment company AMC Networks sent its employees a memo on Tuesday and told them they were planning major layoffs among its staff. The news comes just as AMC’s board of directors is close to making a decision for a new CEO.
AMC CEO, Christina Spade, was promoted to CEO in September but is planning on leaving the role of executive chief behind. According to people familiar with the matter, AMC will likely choose an internal candidate to replace Spade.
The memo was sent by James Dolan, AMC Chairman. The company is trying to figure out how to move forward amid a tough market and major cuts.
Part of Dolan’s memo read:
“AMC Networks Community:
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+. 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 continues by writing, “It is for that reason that myself and the Board of Directors of AMC Networks have concluded that we as a company need to conserve our resources at this time. 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.”
AMC gets over half of its revenue from its linear TV bundle, but the segment has been losing customers who instead are choosing streaming services.
AMC’s quarterly revenue fell by 16 percent in the quarter ending September 30, down to $682 million.
As of December 31, 2021, AMC employed more than 287 part-time workers and 1,700 full-time staff.
Regarding Spade’s departure, Dolan said, “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.”
Spade was hired as the chief financial officer for AMC in 2021 but a few months later, took on the dual role of COO and CFO. In under a year’s time, she was put at the helm of AMC and hired as CEO.
Spade had previously held esteemed positions at CBS Corp, ViacomCBS, and Showtime. According to a regulatory filing, Spade’s severance payment will be dispersed according to her employment agreement from August 4, which stated that she would be eligible for a severance package if she resigned for a good reason or was terminated without cause.
AMC has previously been viewed as an acquisition target for other media companies due to its successful television offerings and streaming services. The media company said that paid subscribers for its streaming division grew by 44 percent to 11.1 million from September 2021 through September 30.