AMC Networks CEO steps down amid plans to lay off 20% of U.S. workforce

Yahoo Finance media reporter Allie Canal breaks down AMC Network's recently announced job cuts and changes in executive leadership.

Video transcript

JARED BLIKRE: Welcome back. AMC Networks, ticker AMCX, closed down over 5% today following the abrupt exit of CEO Christina Spade and news of mass layoffs. Yahoo Finance's Alexandra Canal is here with more on this. Allie.

ALEXANDRA CANAL: Yeah, Jared, and unfortunately, we did get the news that AMC Networks will be laying off about 20% of its US workforce. That's according to a statement that was provided to the Wall Street Journal earlier today, saying, quote, "We have determined we need to conserve resources at this time. This will involve cutbacks in operations, which, unfortunately, includes a large scale layoff, impacting approximately 20% of our employees in the US."

And as you mentioned, this comes after CEO Christina Spade departs the company after less than three months on the job. Now, all of this really has to do with the declines that we've seen in cable television. According to an internal memo that the company sent out to employees earlier today, AMC chairman said that basically they were not able to offset the losses in cable with the growth in streaming.

What you're looking at on your screen now is how streaming has really dominated versus cable and broadcast television. We saw that first happen in August. And those numbers have really held up through the fall. Despite the arrival of a new NFL season, streaming viewership share increased to 37.3% over the month of October, while cable and broadcast continued to lag.

Now, when it comes to the streaming side of AMC Networks, they do own their own streaming platform, AMC+, but that is just over 11 million subscribers. And if you compare that to some of the other competitors like a Netflix or a Disney, it's significantly behind. Netflix has 223 million paying users. Disney+, three years old, over 164 million.

So within this competitive environment, you've really-- it's really difficult to compete. And then coupled with all the macroeconomic challenges facing these cable operators, AMC Networks might need to decide they want to potentially engage in some more M&A, sell off some of their libraries. So a lot to come with operators like this one.

DAVE BRIGGS: Yeah, a very difficult media environment right now.