Rosalind Evans
In a strategic move shaking up its global workforce and market presence, premium network Starz is poised to lay off more than 10% of its staff as it prepares to navigate the corporate waters as an independent entity. Starz CEO Jeffrey Hirsch communicated this tough decision through an email to employees, signalling a significant organizational reshuffle ahead of the company’s planned spinoff from parent company Lionsgate. Amidst these changes, Lionsgate’s shares have witnessed an uptick while Starz streamlines its focus on core growth markets.
Starz is at a pivotal point in its corporate journey as it heads toward becoming a standalone publicly traded company. In an email that found its way to CNBC, Jeffrey Hirsch, the CEO of Starz, broke the news to the company’s workforce that over 10% of them would be facing layoffs. With approximately 670 employees under its wing, the network’s decision to downsize by up to 100 positions, as reported by an insider, marks a sad milestone in the company’s restructuring efforts.
Since December 2016, Starz has operated under the Lionsgate banner following a $4.4 billion acquisition. This corporate unison is slated to dissolve in the first quarter, paving the way for Lionsgate to emerge as a separate publicly traded entity. Amid the preparations for this split, Lionsgate’s stock enjoyed a 6.2% surge in midday trading, reflecting investor optimism amidst the company’s strategic refocusing.
In his correspondence with the staff, Hirsch explained, “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.” This realignment includes a withdrawal from specific international markets, with Starz recently announcing its exit from Latin America and now disclosing plans to leave Australia and the U.K. These moves aim to concentrate the company’s efforts on the U.S., U.K., and Canada markets. However, the U.K.’s exit seems to point toward a deeper strategy of consolidating operations for potential future mergers or acquisitions, with entities like A&E Networks or Paramount Global’s BET being possible targets.
The restructuring goes beyond the geographical retreat, as Starz also integrates its Canadian business directly into U.S. operations. Despite these pullbacks, the network maintains a solid subscriber base, boasting around 12 million domestic streaming subscribers and a total customer count of approximately 20 million when accounting for traditional pay TV sign-ups. The company has carved out a niche market by targeting female and Black audiences with popular series such as “Outlander” and “Power.”
As the company braces for the imminent spinoff, stakeholders are keeping a close watch on Lionsgate, which is on the cusp of releasing its third-quarter earnings. This financial disclosure is expected to shed further light on the implications of the organizational reshaping and market exits for the company’s future profitability and strategic direction.
Both challenges and new opportunities mark the transitional phase for Starz. With significant layoffs and strategic market exits, the company is refining its focus on what it believes to be its core growth drivers. As Starz looks to its standalone future, the entertainment industry watches with anticipation to see how this strategic reorganization will shape the network’s trajectory and its ability to compete in the ever-evolving media landscape.
