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DirecTV cuts 10% of management workforce

DirecTV is cutting hundreds of jobs, mostly impacting manager positions, as the satellite TV provider looks to reduce operating costs.

DirecTV is slashing roughly 10% of its management workforce, which represents a minority portion of the overall employee count, with the layoffs spread across the company. Manager positions account for about half of the satellite TV provider’s less than 10,000 employees, according to CNBC, citing people familiar with the matter.

Layoffs have already begun, and the update is effective January 20.

The move appears to be part of a cost cutting effort at the satellite pay TV provider, which separated out from AT&T in 2021.

In a statement provided to Fierce Video, DirecTV pointed to declines in the pay TV industry and continually rising operations costs, particularly around programming.

“The entire pay-TV industry is impacted by the secular decline and the increasing rates to secure and distribute programming,” a DirecTV spokesperson said in a statement. “We’re adjusting our operations costs to align with these changes and will continue to invest in new entertainment products and service enhancements.”

In a December 2, 2022, Q3 Cord Cutting Monitor report by MoffettNathanson, the Wall Street firm highlighted the tough spot that satellite pay TV providers, including Dish Network and DirecTV, are in. Unlike cable operators such as Charter and Comcast who shifted to broadband services and are now also focused on wireless businesses while deemphasizing video, DirecTV’s only residential product is video, and the firm categorized satellite TV challenges as “dire.”

“Dish Network and DirecTV are not only confronted with the inexorable decline of the linear Pay TV industry, but they further face the incursion of rural fiber buildouts and fixed wireless broadband, both of which are eroding satellite’s once protected rural flank,” wrote analysts Craig Moffett and Michael Nathanson, last month.

The firm, which doesn’t cover DirecTV since it became private, said satellite is at a “significant competitive disadvantage” where it competes with terrestrial alternatives, pointing to a lack of broadband bundle as well as “its lack of ability to offer a true VOD service, something that is almost universally a table-stakes expectation for customers for whom broadband and/or Cable is available.”

According to MoffettNathanson, Dish has consistently done a better job at retaining subscribers than DirecTV, which it said is likely due in part to Dish’s rural skew as well as lower prices but noted its strategy is losing efficacy. Still, DirecTV’s satellite and U-Verse base has been shrinking.

“Losses at DirecTV, which had shown some signs of moderation during the COVID crisis, have reaccelerated to -16.5%,” wrote the analysts in the December research note to investors.

On the programming front, DirecTV faced retransmission renewal disputes in 2022 including with White Knight Broadcasting and Mission Broadcasting that saw stations pulled in October from the satellite system as well as U-Verse and DirecTV Stream.

In another hit, starting with the 2023 season the NFL’s Sunday Ticket package is going to virtual MVPD YouTube TV and YouTube Primetime Channels under a new deal, leaving DirecTV which previously held rights to the coveted football package and distributed Sunday Ticket since 1994. But while key sports content is leaving DirecTV, MoffettNathanson analysts, in a January 6 research note, said that it’s widely understood the satellite TV provider had been losing money, including during the current season, on its Sunday Ticket rights package, and estimated YouTube would need to draw in 6 million Sunday Ticket subscribers to just break even.

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