On Friday, Starz CEO Jeffrey Hirsch announced the layoffs in an email message sent to staff and obtained by various entertainment trade publications and news outlets.
The note, first reported by CNBC, affirmed the studio was issuing pink slips and exiting the United Kingdom and Australia, where localized versions of the Starz streaming service have been available for a few years.
“As difficult as it is, with many of our employees being impacted, 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,” Hirsch wrote in the memo, a copy of which was also obtained by The Desk.
That next chapter involves separating Starz from Lionsgate, which will allow the former to focus on building out its dual movie network-streaming service in the United States while also promoting its Starzplay digital service overseas.
Lionsgate is expected to continue operating its film and television studio business, which includes licensing Lionsgate-produced shows and movies to other services like Netflix, Paramount Plus and Amazon’s Prime Video. Starz will continue licensing content from Lionsgate under existing agreements that are likely to be extended once it splits from the film studio.
“What has been instrumental to our successful transition from a linear-only business into the new digital world has been our laser focus on the changing environment, anticipating what lies ahead and adapting the organization to succeed in this disruptive environment,” Hirsch continued in the memo. “It’s why we continue to stand out as one of the only profitable premium networks.”
The pullback from its U.K. and Australian businesses will also see a reduction in the Starz workforce that will lead to around 80 positions being eliminated, according to a person familiar with the matter. Earlier, CNBC reported more than 10 percent of employees at Starz would be affected by layoffs, and cited an unnamed source who put the figure in the “high double-digits, but less than 100.”
Lionsgate and Starz are not commenting on the situation.
The Starz spin-off was originally expected to occur by the end of this year, but over the summer, executives at Lionsgate said the split date was being pushed back to early 2024. The delay was intended to help Starz better align its domestic and international operations, according to a source.
Shortly after the delay was revealed, Lionsgate affirmed Starz was pulling out of several Latin American countries. Lionsgate-owned content that was once distributed by Starz is now being offered to other broadcasters and streaming services who operate in the region, and some films and shows have already found new homes there.
In Canada, Starz is expected to consolidate its business with that of its U.S. operation, creating a North American division that will oversee development, content licensing and marketing in both countries.
Last quarter, Lionsgate revealed Starz and Starzplay had around 20 million streaming customers, with Starz in the United States counting 12 million households that pay for either the streaming product or the multiplex movie network. The network, which is offered to cable and satellite companies, also includes access to the online version of Starz.