SiriusXM examines job cuts as revenue growth slows (report)
US satellite radio service SiriusXM plans to reduce its headcount as the company’s revenue growth continues to slow.
The satellite radio service, controlled by billionaire John Malone, warned of possible job cuts at a city hall with employees on November 28 as the company looks at ways to cut costs and increase efficiency. Bloomberg News reported December 1, citing people familiar with the matter.
“This may indicate the need for downsizing,” management is said to have said at the time.
At the end of 2021, SiriusXM had 5,590 full-time and part-time employees. The report was unable to determine how many jobs would be affected by the planned layoffs. In 2021, the company reduced its headcount by about 2.4% from 2020, the company said Annual Report 2021.
SiriusXM Chief Executive Officer Jennifer Witz is reportedly planning to cut costs in preparation for a potential economic downturn.
“We expect the continued uncertainty surrounding macro factors and recessionary trends that will impact the broader economy over the coming months to weigh on the digital audio display market,” Witz told analysts during a Result call in November.
There was also news of the company-wide Zoom meeting where management hinted at the possible job cuts picked up through billboard.
Witz reportedly said the company is looking “where there is room for more efficiency.”
“The results of this review will highlight the other areas where we may need to reduce spending and may indicate the need for downsizing… In the meantime, we need to accurately assess our hiring needs and target-prioritize roles that align with our strategic initiatives.” ‘ Witz was quoted as saying by Billboard in notes accompanying the call.
The reported layoffs come as SiriusXM suffers from slowing sales after its new auto listeners shrank to about 7 million third quarter.
“SiriusXM’s test launches for new and used vehicles both declined 4% sequentially as auto industry sales remain weak and vehicle prices remain near record highs,” said Sean Sullivan, SiriusXM’s chief financial officer, during the earnings call the results of the third quarter.
Sullivan warned at the time that analysts expect the trend to continue as the seasonally adjusted annual estimate fell to 14.8 million from 16.6 million.
“We expect continued softness to continue to impact the trial funnel and self-pay net gains in the fourth quarter and into next year,” said the executive.
SiriusXM, home of Howard Stern, reported third-quarter revenue growth of 4% year over year to $2.28 billion. According to Bloomberg analysts, revenue growth is expected to slow to just 1% in the fourth quarter.
While the group’s self-pay subscribers increased by 187,000 to 32.2 million at the end of the third quarter, paid advertising subscribers declined by 49,000.
Another weak link in SiriusXM’s recent financial numbers is declining advertising budgets.
Q3 ad revenue “remained relatively flat as macroeconomic factors led to a slowdown in ad spend towards the end of the quarter,” Witz said during the group’s Q3 earnings conference call.
If the reported job cuts are confirmed, SiriusXM, which now owns Pandora, would become the latest company to cut its workforce amid macroeconomic concerns and fears of a potential recession.
Amazon’s layoffs are now reported to affect up to 20,000 employees including top managers. Facebook parent Meta announced it is cutting about 13% of its global workforce and extending its hiring freeze through the first quarter of 2023, while TikTok parent ByteDance has reportedly begun laying off some of its employees in the US and Europe.
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https://www.musicbusinessworldwide.com/siriusxm-explores-job-cuts-on-slowing-revenue-growth-report/ SiriusXM examines job cuts as revenue growth slows (report)