AMC Networks is the latest entertainment company to announce layoffs — with plans of cutting nearly 20% of its workforce in the U.S.
As first reported by The Wall Street Journal, this will amount to roughly 1,700 employees. AMC Networks Chairman James Dolan sent a memo addressing the layoffs as a product of the changing landscape for monetizing content.
“It was our belief that cord cutting losses would be offset by gains in streaming,” Dolan said in the memo obtained by IndieWire. “This has not been the case.”
According to CNBC, the news comes at the heels of CEO Christina Spade stepping down from the role three months after getting promoted. Now, AMC Networks is on the hunt for another CEO, probably an internal candidate.
The company is the home to cable networks like AMC, IFC and Sundance TV, but also has streaming services like AMC+, Acorn TV and Shudder under its umbrella. As more customers are making the switch to streaming, the network’s main source of income is jeopardized. “Quarterly revenue had fallen 16% to $682 million in the period ended Sept. 30,” as CNBC noted.
The Hollywood Reporter noted that in recent years, AMC “turned to more foreign co-productions with short-order originals to remain competitive.” But things have changed as the network wrapped up hits like “The Walking Dead,” “Better Call Saul” and “Killing Eve” in 2022.
Dolan said in the memo that this is “a confusing and uncertain time” in the industry. He acknowledged that while these cuts will be a cause of concern and anxiety for many, the company plans to “take every step possible to minimize the impact of these actions.”
“However, it is imperative that we begin immediately with this new course of action,” Dolan added.
AMC Networks, which isn’t related to the AMC theater chain, is one of the first major players in the entertainment industry to eye cost-cutting measures. Companies like Warner Bros. Discovery, Disney, Paramount, Apple, NBC Universal and Amazon may also follow suit, Insider Intelligence principal analyst Paul Verna told CNN.
One of the ways to make a streaming business model successful is through the consolidation of various streaming sites which will allow a handful of companies to reduce their investment costs while retaining lots of subscribers with lower prices, as I reported for the Deseret News.
“They’ve bumped up against the reality that it’s a tough business and there really isn’t room for everybody in it,” Verna said. “It’s just saturated. And a lot of it does get back to the economy. And, as a result, more dominoes are going to fall.”