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AMC Networks to See ‘Large-Scale Layoff’ After Streaming Miscalculation: Read the Memo

"It was our belief that cord cutting losses would be offset by gains in streaming. This has not been the case."

Samantha Morton as Alpha - The Walking Dead _ Season 10, Episode 2 - Photo Credit: Jace Downs/AMC

“The Walking Dead”

Jace Downs/AMC

AMC Networks is about become the latest entertainment company to undergo layoffs. The company will begin “large-scale layoffs” soon, according to a memo sent to staff from James Dolan on Tuesday.

In the memo, Dolan, the CEO of AMC parent company MSG Entertainment, attributed the decision to subscriber losses via cord-cutting, or the cancellation of cable bundles in favor of streaming. Dolan said that AMC initially believed gains in subscribers for their streamers like AMC+ and Shudder would offset losses from cable cutting, but their estimates proved to be wrong.

“It was our belief that cord cutting losses would be offset by gains in streaming. This has not been the case. We are primarily a content company and the mechanisms for the monetization of content are in disarray,” Dolan said in the memo. “We have directed the executive leadership of AMC Networks to undergo significant cutbacks in operations. These will include a large-scale layoff as well as cuts to every operating area of AMC Networks.”

The news comes on the same day that AMC’s CEO Christina Spade stepped down from her post after less than three months on the job. AMC has told IndieWire that the company’s board “is currently finalizing who it will name as a replacement, with an announcement to follow.” Spade will receive severance following her exit from the company, meaning she was terminated “without cause” or resigned for “good reason,” according to her employment agreement.

As predictions of a recession have increased, several entertainment companies have spent the fall cost-cutting and laying off staff as a preemptive measure. These layoffs have affected several divisions at Warner. Bros Discovery, Criterion, and Nexstar. Other companies, like Disney, have responded to the looming recession through a targeted hiring freeze.

AMC Networks — not to be confused with the movie theater chain AMC Entertainment — is the home to cable channels AMC, BBC America (a joint venture with BBC Studios), IFC, SundanceTV, and WEtv, as well as IFC Films, RLJE Films, and the company’s in-house studio AMC Studios. It is also the home of streaming services AMC+, Acorn TV, Shudder, Sundance Now, ALLBLK, and the anime-focused HIDIVE. There’s also AMC Networks International and 25/7 Media.

Read Dolan’s memo, which was obtained by IndieWire, below.

AMC Networks Community:
As I am sure you are aware our industry has been under pressure from growing subscriber losses. This is primarily due to “cord cutting.” At the same time we have seen the rise of direct to consumer streaming apps including our own AMC+. It was our belief that cord cutting losses would be offset by gains in streaming. This has not been the case. We are primarily a content company and the mechanisms for the monetization of content are in disarray.

It is for that reason that myself and the Board of Directors of AMC Networks have concluded that we as a company need to conserve our resources at this time. We have directed the executive leadership of AMC Networks to undergo significant cutbacks in operations. These will include a large-scale layoff as well as cuts to every operating area of AMC Networks. We of course realize that this will cause significant concern and anxiety for our employees and those who rely on AMC Networks for their livelihood. We do not take this lightly. We will take every step possible to minimize the impact of these actions on our community. However, it is imperative that we begin immediately with this new course of action.

The Dolan Family and the Board of AMC Networks have great pride in the company and products that you have created. This is a confusing and uncertain time in our industry. We are confident that AMC Networks will come through this even stronger. Your executive leadership will follow up with details shortly. We wish only the best for everyone in the AMC Networks community.

Sincerely,
James Dolan

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