AMC Networks on Thursday disclosed that it expects to incur up to $475 million in restructuring charges, related primarily to content, as well layoffs at the company as it looks to cut costs.
In an 8-K filed with the SEC, AMC estimated between $350 and $475 million in pre-tax restructuring, with the lions share (between $300-$400 million) related to strategic programming assessments. As a result, review under the plan includes a broad mix of owned and licensed content, including legacy TV series and films that will no longer be in active rotation on AMC’s linear and digital platforms, the company said.
Organizational costs, including severance and retention, are expected to reach between $50 million and $75 million. Cash expenditures related to the restructuring are estimated between $75 million to $100 million, most of which will be made in 2023.
Cost saving moves are “in light of ‘cord cutting’ and the related impacts being felt across the media industry as well as the broader economic outlook,” AMC said in its filing to the SEC.
Earlier this week the Wall Street Journal reported that AMC was planning a mass layoff, impacting around 20% of U.S. employees. This came at the same time as CEO Christina Spade abruptly stepped down, less than three months after she took the helm of AMC in September. AMC’s board is still finalizing a replacement.
In the third quarter AMC saw net revenue decline 16% year over year to $682 million in part due to lower affiliate and advertising revenues.
Layoffs are rippling through the media industry as companies pursuing streaming efforts look for ways to build profitable businesses. Warner Bros. Discovery’s CNN this week was one of the latest as cuts began, largely impacting paid contributors. Roku has also been impacted, citing a weak ad market and the macroeconomic environment when it recently disclosed plans to trim headcount by around 200 employees in the U.S.