ESPN Announces Job Cuts
It is the message from a company chief executive officer that everyone is dreading. ESPN CEO John Skipper has just posted a message online to employees that job cuts are underway as part of the “organizational changes” the broadcast sports network has to make as part of its efforts to “create important competitive advantages” for the business in the long term.Advertisement
It seems the said job cuts will be done immediately with Skipper assuring everyone affected that they will be given a minimum 60-day notice, a severance package that takes into account an employee’s years of service as well as outplacement benefits. According to a report from the NPR, it seems the sports network is looking at cutting as much as 4 percent of the company’s workforce, which amounts to around 300 employees. The network reportedly has approximately 8,000 employees.
This move is actually part of a three-pronged broad strategy the company has created to ensure the future of the network. These include the continuous integration of the business with technology, the enhancement of sales and marketing efforts and the integration of distribution efforts in order to serve partners better.
Bob Iger, the Chief Executive Officer and Chairman of The Walt Disney Company (ESPN’s parent company), had once remarked that they have “enormous confidence in ESPN’s future.” This is because 96% of all sports programming is actually watched live and “ESPN is the leader in live programming.” In 2015 alone, Iger says that 83% of multi-channel households actually watched the channel at some point.
Sure, the sports network did experience what Iger refers to as “modest sub(subscription) losses,” but they were less than what a prominent research firm had reported. Moreover, these loses were mostly due to a decrease in multi-channel households. Iger believes that households will continue to recognize the value of its expanded package, which is priced fairly.
During its third quarter for the year, ESPN also experienced an increase in affiliate revenue. However, the said gains were said to have been offset partially by a lower advertising revenue.