A DirecTV technician at an apartment building in Lynwood, Calif.
Patrick T. Fallen | Bloomberg | Getty Images
DirecTV is laying off hundreds of employees — about 10% of its upper ranks, according to people familiar with the matter — as the company looks to reduce costs amid the growing pains of cord cutting for pay-TV providers.
Most of the job cuts will be at the manager level, the people said, citing an email to employees sent Friday. About half of DirecTV’s workforce of fewer than 10,000 are managers, one of the people said. The last day of the affected employees will be January 20.
“The entire pay-TV industry is affected by secular decline and rising rates to secure and deliver programming,” a DirecTV spokesperson said in a statement. “We are adjusting our operating costs to align with these changes and will continue to invest in new entertainment products and service enhancements.”
DirecTV became a private company in 2021 when AT&T tied up with private-equity firm TPG Separation of DirecTV and its related businesses, with an implied enterprise value of $16.5 billion at the time. AT&T acquired DirecTV in 2015 for $48.5 billion plus the assumption of debt.
DirecTV and its partners have long been under pressure as customers cut the cord and opt for streaming services. According to MoffettNathanson, the rate of cord cutting accelerated in the third quarter.
satellite TV providers such as DirecTV and Cooking Some of the most pay-TV subscribers have been lost, especially in recent years. While DirecTV no longer publicly reports its subscriber base, the company has about 13 million subscribers, according to the analyst report and one of the people familiar with the job cuts.
According to ratings agency Fitch, DirecTV lost nearly 500,000 subscribers in the most recent quarter. Although DirecTV losses slowed during the height of the pandemic, they spiked to nearly 17% recently, according to Moffett Nathanson.
In addition to satellite TV, the company also offers DirecTV Stream, which is similar to an Internet-TV bundle. Google’s YouTube TV and Dish Sling.
Competition in rural areas has increased as broadband and fixed wireless companies build networks in areas where satellite TV providers were once some of the only TV providers.
Meanwhile, the fee for broadcast and cable channels continues to rise. Officials across the industry have blamed rising fees as partly responsible for accelerating the loss of pay-TV subscribers in recent years.
In addition, media companies are offering more content traditionally found on linear TV, such as weekly shows, live events and sports, on streaming services, further pulling the value out of pay-TV bundles.
DirecTV’s contract recently expired for the rights to NFL’s “Sunday Ticket” Out of the Market Sunday Games Package. It had held the rights since the inception of “Sunday Ticket” in 1994 and was losing about $500 million annually on the package. CNBC reported earlier.
The people said the impending layoffs include only a small fraction of the staff associated with “Sunday Ticket”.