A DirecTV technician in a building in Lynwood, California.
Patrick T. Fallon | Bloomberg | Getty Images
DirecTV is laying off hundreds of employees – about 10% of its top ranks – as the company seeks to cut costs amid heightened cord-cut pain for pay-TV providers, according to people familiar with the matter .
Most of the job cuts will be at the manager level, the sources said, citing an email to employees sent on Friday. Managers make up about half of DirecTV’s less than 10,000 employees, one of the people said. The last day for affected employees will be January 20.
“The entire pay-TV industry is impacted by secular decline and rising tariffs to secure and distribute 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 went private in 2021 when AT&T reached an agreement with private equity firm TPG to separate 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 and debt assumption.
DirecTV and its peers have long been under pressure as customers cut the cord and switch to streaming services. The rate of cord cutting accelerated in the third quarter, according to MoffettNathanson.
Satellite TV providers such as DirecTV and Plate in particular have experienced some of the highest pay-TV subscriber losses in recent years. While DirecTV no longer publicly reports its subscriber base, the company has about 13 million customers, according to reports from analysts and one of the people familiar with the job cuts.
DirecTV reportedly lost around 500,000 customers in its last quarter, according to ratings agency Fitch. Although DirecTV’s losses slowed during the height of the pandemic, they have recently accelerated to nearly 17%, according to MoffettNathanson.
In addition to satellite TV, the company also offers DirecTV Stream, an Internet-TV package similar to from google YouTube TV and Dish’s Sling.
Competition has intensified in rural areas as broadband and fixed wireless companies build networks in areas where satellite TV providers were once among the only TV providers.
Meanwhile, broadcast costs for TV and cable continue to rise. Industry executives have cited rising fees as partly responsible for accelerating pay-TV customer losses in recent years.
Additionally, media companies are bringing more content traditionally found on linear TV, such as weekly shows, live events and sports, to streaming services, deriving even more value from the pay television.
DirecTV’s contract recently ended for the rights to the NFL’s “Sunday Ticket” package of out-of-market Sunday games. He had owned the rights since “Sunday Ticket” was created in 1994 and was losing around $500 million a year on the package, CNBC previously reported.
The impending layoffs affect only a small portion of employees linked to “Sunday Ticket”, the people said.