Endeavor on Wednesday said that it will implement employee layoffs, furloughs and pay cuts in a move that is expected to impact roughly a third of the company’s workforce.
“The long-term prospects for Endeavor remain unchanged, but like other companies, we are taking a variety of actions to mitigate the impact of this pandemic,” an Endeavor spokesman said in a statement. “Since late March, we have been rolling out cost-saving measures in phases across our companies and geographies and intend to complete most of this process in late May. Approximately a third of our population will be impacted by reduced pay for reduced work, furlough, or position elimination, with the majority affected by reduced work and furlough.”
Endeavor, which currently employees 7,500 people in more than 90 offices around the world, will see the cost-cutting measures hit major divisions of the company’s business, including talent agency WME and IMG.
Endeavor, like many businesses, has been hard hit by the ongoing novel coronavirus pandemic, which has effectively ground Hollywood to a halt.
Earlier this month Endeavor said it planned to cut pay by up to 30% for all staffers. That was after temporarily laying off roughly 250 in operational positions who weren’t able to perform their jobs from home.
All such decisions are moves made in order to help keep buoy the company through a period in which revenues are stagnant due to the pandemic. Endeavor is looking to shed expenses and bolster liquidity.
Endeavor has a mound of debt on its books, incurred mainly from its $2.3 billion acquisition of media, sports and fashion giant IMG, and its $4 billion acquisition of the Ultimate Fighting Championship. As of last September, when the company nixed a planned initial public offering, Endeavor reported having nearly $5 billion in debt.
The company recently saw S&P Global downgrade its credit rating to CCC+, which represents substantial risk, down from a B rating. The credit agency also changed the company’s outlook to negative.
Endeavor is, however, backed by private equity firm Silver Lake Partners, which in 2012 bought a 31% minority stake in the entertainment company for $200 million. That investment helped propel the company’s growth.