ESPN president John Skipper explained the company’s new round of layoffs on Wednesday, calling it a difficult but necessary decision to provide the network with “competitive advantages” for years to come. Nearly 300 employees are expected to be pink-slipped, an insider with knowledge of the situation told TheWrap.
“I realize this process will be difficult — for everyone — but we believe the steps we are taking will ultimately create important competitive advantages for our business over the long term,” Skipper wrote in a published memo to staff.
He cited three key factors that went into the decision to cut staff dramatically: increased integration of technology into ESPN products, new sales tools that better utilize data and customization for advertisers, and integrating distribution efforts to better serve current and future partners.
Skipper concluded that cutting employees in the name of constant evolution isn’t taken lightly, but it’s a “necessary part of our continued strategic evolution to ensure ESPN remains the leader in sports.”
The expected cost-cutting action follows Disney’s announcement in August that earnings at its cable networks won’t meet company forecasts as a result of subscriber losses and currency translation, which triggered a selloff in the shares of many media companies.
ESPN is reacting to and preparing for changes in the cable business, as cord cutting steadily strangles subscriber fees, CNN Money reported.