AMC Networks plans to lay off about 20% of its U.S. workforce as CEO Christina Spade departs the company after less than three months on the job.
“We have determined we need to conserve resources at this time,” the company said in a statement to The Wall Street Journal on 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 stock fell on the news, falling more than 5% in late afternoon trading.
AMC Chairman James Dolan reportedly told employees the network has struggled to offset cable declines, referencing the company’s owned-streaming entities like AMC+ and horror platform Shudder.
“It was our belief that cord cutting losses would be offset by gains in streaming,” Dolan wrote. “This has not been the case.”
AMC+, which launched in July 2020, saw total subscribers climb to 11.1 million in the third quarter, a rise of 44% on a year-over-year basis; however, those numbers significantly lag competitors with Netflix (NFLX) boasting approximately 223 million paying users while three-year-old Disney+ (DIS) maintains 164.2 million.
AMC Networks did not immediately respond to Yahoo Finance’s request for comment.
Tuesday’s job cuts at AMC come amid an acceleration in cord-cutting, in addition to increased competition in the streaming space.
According to data from Nielsen, streaming consumption surpassed both cable and broadcast TV for the first time ever in August — capturing 34.8% of total viewership versus cable’s 34.4% and broadcast’s 21.6%,
Those numbers held up throughout the fall, despite the arrival of a new NFL season. Streaming’s viewership share increasing to 37.3% over the month of October while cable and broadcast lagged, garnering 32.9% and 26% share, respectively.
‘All the small fish are being eaten up’
AMC Networks, home to popular shows like “The Walking Dead,” “Breaking Bad,” and “Better Call Saul,” is the latest victim of the cord-cutting era after first rising to prominence with the debut of “Mad Men” in 2007 — the beginning of an era often referred as the golden age of TV history.
Cable TV was once the dominant form of at-home entertainment — and AMC Networks was one of many broadcasters that helped make cable exciting.
The media landscape has changed rapidly in the last decade-plus, and consumers have a lot more choices to juggle with streaming now at the forefront, dominated by market leaders like Netflix, Apple TV+ (AAPL), Amazon Prime Video (AMZN), among others.
Profitability concerns have plagued direct-to-consumer platforms, too, with companies like Warner Bros. Discovery (WBD), Paramount Global (PARA), and Disney facing huge losses and increased pressure from investors to turn a profit.
“The mechanisms for the monetization of content are in disarray,” AMC’s Dolan wrote in the memo.
Anthony Palomba, professor of business administration at UVA’s Darden School of Business, previously told Yahoo Finance that cable’s challenges will likely only accelerate in the years to come.
“We’re in a period of survival of the fittest,” he stated. “We’re seeing that with the streaming wars in which premium content, especially content that can be readily identified with the parent streaming company, is huge.”
Palomba, who specializes in entertainment consumer behavior, said he’s not sure what else cable can do to rebound or combat the shift in consumer preferences, suggesting certain offerings may have to reassess their future within the space.
“Some of these cables channels may really have to consider whether or not they want to be bought to add value to something else, like joining a streaming service as part of a library,” he suggested. yahoo! finance