Starz to lay off more than 10% of employees ahead of Lionsgate spinoff
Starz, the premium network and streaming service that will soon be its own publicly traded company, is laying off more than 10% of employees and is exiting Australia and the U.K.
Starz Chief Executive Officer Jeffrey Hirsch announced the news in an email to staff obtained by CNBC on Friday. Starz has about 670 employees. He also addressed staff in a companywide town hall.
The cuts will be in the high double digits but less than 100, according to a person familiar with the matter. A Starz spokesperson declined to comment on the number of cuts but confirmed the authenticity of the letter to staff.
Lionsgate and Starz have been part of the same company since December 2016, when Lionsgate acquired Starz for $4.4 billion. That marriage will end in the first quarter, when the company plans to spin off Lionsgate as a separately traded company.
“We are making these changes to align our organization with the growth areas of the business and to prepare us for our next chapter as a standalone company,” Hirsch wrote in the note.
Lionsgate shares closed more than 7% higher Friday.
Starz announced last quarter it planned to exit Latin America to focus on the U.S., U.K. and Canada. Departing the U.K. will scale down the company’s operations and potentially prepare it to merge with or acquire another U.S.-based media asset, such as A&E Networks or Paramount Global’s BET.
Starz is also folding its Canadian business into its U.S. operations.
Starz ended last quarter with about 12 million domestic streaming subscribers and about 20 million total customers when including those who sign up through traditional pay TV. The entertainment company has focused on female and Black audiences with series including “Outlander” and “Power.”
Lionsgate is scheduled to report its third-quarter earnings Thursday.
WATCH: Hulu can help bring ads to the rest of the media ecosystem
Don’t miss these stories from CNBC PRO:
- Bank of America’s investment strategist says the S&P 500 correction could last until it hits this level
- A ‘panic spike’ is possible late October into November, says Bank of America’s chart analyst
- The S&P 500 has entered a correction. Here’s why Warren Buffett likely thinks that’s good news
- Morgan Stanley auto analyst Jonas says investors are ‘waking up’ to idea that Ford, GM are not a way to play EV boom
This post has been syndicated from a third-party source. View the original article here.
