Comcast-owned pay television company Sky is planning a round of significant layoffs that will primarily impact the satellite broadcasting side of the business, according to a report published this week.
The report, published by the Financial Times, said hundreds of employees could receive pink slips over the next few weeks. The precise number of layoffs will depend on the outcome of negotiations with union labors and other key stakeholders.
Sky offers pay television service through satellite and streaming in the United Kingdom, Northern Ireland, Germany, Austria, Switzerland and Italy. The layoffs would concentrate mainly on Sky’s satellite business in the United Kingdom and Northern Ireland, where Comcast employs around 32,000 people. The move comes as Comcast shifts its focus away from satellite delivery of television networks toward streaming.
Satellite dish installers, engineers and technical support workers are expected to be among those laid off. Comcast is also weighing cuts at Sky’s customer support centers in the United Kingdom.
It is the latest indication that Comcast’s big bet on pay television in Europe might not be paying dividends as once hoped. Comcast acquired Sky’s European satellite business in 2018 after outbidding Fox Corporation, which held a one-third stake in the business. The final purchase price eclipsed $39 billion.
Since then, Comcast has largely operated Sky without much change while it struggles to run a television business that operates very differently from the American pay television system it grew across several decades.
Unlike in the United States, television viewers in many of the European countries where Sky operates must pay an annual license simply if they watch broadcast or cable television of any kind. The fees charged by Sky and other pay TV companies are in addition to the license fee, which can cost upwards of $200 in some areas.
The license fee helps support broadcasters that are owned by the public, and the majority of television consumption in those countries still occurs via broadcast channels. Still, streaming is catching on in those countries, and pay television is being left behind.
Comcast has sought to address this shift by offering streaming-only options for Sky customers in the United Kingdom and Northern Ireland. A new streaming device was introduced last year, as was a smart television set called Sky Glass. Neither have gained much traction.
Recently, Comcast has started to indicate its doubts about the future of pay television in Europe. In October, financial news outlet Bloomberg said Comcast was exploring the possibility of selling its German pay television business; two months later, reports indicated a media company in France might make a bid for it. The parent company of private broadcaster ProSieben also expressed interest in the business, but talks did not advance beyond initial stages.
Two months ago, Comcast said it would lay off 800 workers at Sky Italia, its pay television business in Italy, blaming weak economic factors for the move. The job cuts were in addition to 400 layoffs that were previously announced.