AMC Networks to Lay Off 20% of U.S. Workers as CEO Christina Spade Exits - WSJ
“We have determined we need to conserve resources at this time,” the entertainment company said Tuesday. “This will involve cutbacks in operations which unfortunately includes a large-scale layoff, impacting approximately 20% of our employees in the U.S.” AMC said it has about 1,000 U.S. employees.
The planned job cuts come as AMC, which for the past 15 years has been home to many popular TV shows including “Mad Men” and “Breaking Bad,” is struggling to generate enough money from its streaming services to make up for the continued decline of cable television, as Americans cancel their pay-TV packages in droves.
“It was our belief that cord cutting losses would be offset by gains in streaming,” AMC Chairman James Dolan said in an earlier memo to employees, which was reviewed by The Wall Street Journal. “This has not been the case.”
Hits such as ‘Mad Men,’ starring Jon Hamm, helped transform AMC Networks into a TV tastemaker.
Mr. Dolan said the board instructed AMC’s executive leadership to undergo significant cutbacks in operations.
Earlier Tuesday, AMC said CEO Christina Spade had stepped down. Ms. Spade, who the company said wasn’t terminated for cause, didn’t respond to a request for comment. The company said its board is finishing work to name a successor.
AMC Networks, whose brands include its namesake channel, as well as IFC, WE tv and Sundance TV, was among the many media companies that rode a wave of growth as cable TV was in its last lap of dominance in the media ecosystem. Its high-end, dark dramas—about zombies, ad executives in the 1960s, a high-school teacher turned meth kingpin—helped usher in an era of “prestige” TV.
As a relative minnow surrounded by much larger media companies, AMC hasn’t been in a strong position to compete against streaming giants such as NetflixInc. and Amazon.com Inc. Even big players such as Walt Disney Co., Warner Bros. Discovery Inc. and Paramount Global, which have marshaled considerable resources to enter the streaming wars, have struggled to find a profitable path.
“The mechanisms for the monetization of content are in disarray,” Mr. Dolan said in his memo.
AMC isn’t related to the theater chain AMC Entertainment Holdings Inc. Shares of AMC were down 4.5% in afternoon trading Tuesday. The stock has dropped by more than 40% so far this year.
Disney, whose streaming business lost nearly $1.5 billion in the most recent quarter alone, earlier this month fired Chief Executive Robert Chapek and brought back his predecessor, Robert Iger, at the helm.
David Zaslav, the CEO of Warner Bros. Discovery Inc.—whose properties include HBO Max, Discovery+, the Warner Bros. movie studio and cable channels TNT, Food Network, HBO and CNN—recently said that profitability, not the number of streaming subscribers, would be the company’s benchmark of success. “I believe the grand experiment chasing subs at any cost is over,” Mr. Zaslav said earlier this month.
AMC embraced the rise of streaming services a decade ago. Ratings for “Breaking Bad,” one of its highest-profile shows, improved after previous seasons of the show became available on Netflix Inc., a sign that the relationship between cable networks and streaming services could be mutually beneficial. That dynamic changed when streamers started embracing original content and the number of streaming platforms ballooned.
AMC in recent years entered the streaming fray with its own services, including AMC+. The company continues to license its programming to other platforms. In the U.S., recent episodes of high-profile shows including “Better Call Saul” and “The Walking Dead” can be streamed exclusively through AMC+—which costs $8.99 a month—for a limited time.
The layoff announcements just keep coming. As interest rates continue to climb and earnings slump, WSJ’s Dion Rabouin explains why we can expect to see a bigger wave of layoffs in the near future.
In his memo to employees, Mr. Dolan said he and the AMC board realized the cutbacks would cause significant concern and anxiety for its employees. “We do not take this lightly,” Mr. Dolan said. “However, it is imperative that we begin immediately with this new course of action.”
Ms. Spade, the departing CEO, previously held senior roles at ViacomCBS Inc., CBS Corp. and Showtime. She joined AMC as chief financial officer in January 2021 and took on the additional post of chief operating officer about a year ago.
“We thank Christina for her contributions to the company in her CEO role and her earlier CFO role, and we wish her well in her future endeavors,” Mr. Dolan said in a statement earlier Tuesday.
Advertisement - Scroll to Continue
Ms. Spade became CEO on Sept. 9, succeeding Matthew Blank, the former chairman of Showtime Networks and a senior adviser at the investment bank Raine Group LLC. Mr. Blank had been serving as interim CEO since September 2021.
Her brief stint at the helm comes after longtime AMC Networks CEO Josh Sapanstepped down last year after a 26-year run, during which he shepherded many TV hits and AMC’s foray into video streaming.
AMC Networks said in a securities filing that Ms. Spade would receive the severance benefits detailed in her Aug. 4 employment agreement, which was set to expire on Dec. 31, 2025. The company said she would receive her benefits as outlined for either being terminated on a without-cause basis or resigning on a for-good-reason basis.
Ms. Spade is set to receive a severance payment of more than $10 million, in addition to benefits associated with restricted stock units and other awards, according to the terms outlined in the employment agreement.