Workforce Shifts at Starz: More Than 10% of Employees Facing Layoffs in Anticipation of Lionsgate Spinoff

Business / Monday, 06 November 2023 08:30

"Starz Initiates Workforce Changes: Over 10% Facing Layoffs, Exit from Australia and the U.K. Ahead of Lionsgate Spinoff"

In a significant restructuring move, Starz, the premium network and streaming service set to become a standalone publicly traded company, is implementing layoffs affecting more than 10% of its workforce. The company, led by Chief Executive Officer Jeffrey Hirsch, is also making strategic exits from Australia and the U.K., aligning its operations with growth priorities as it prepares for autonomy.

The news was communicated to Starz employees through an email from Hirsch, obtained by CNBC. The layoffs are expected to be in the high double digits, though less than 100, according to insider sources. Starz, currently part of Lionsgate since its acquisition in December 2016 for $4.4 billion, will undergo a spinoff in the first quarter, severing ties with Lionsgate and establishing itself as an independent entity.

Hirsch addressed the rationale behind the workforce changes, stating, “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.” The move is part of a strategic realignment in anticipation of the spinoff.

While the exact number of job cuts remains undisclosed, a Starz spokesperson confirmed the authenticity of the communication to staff. Lionsgate and Starz have been under the same corporate umbrella for years, and the forthcoming separation marks a pivotal moment for both entities.

In addition to the workforce adjustments, Starz also announced its departure from Australia and the U.K., streamlining its operations to focus on the U.S., U.K., and Canada. This move positions Starz for potential mergers or acquisitions with U.S.-based media assets, presenting opportunities for future growth and expansion.

Starz's streaming services, catering to about 12 million domestic subscribers and a total customer base of approximately 20 million, have targeted diverse audiences, emphasizing content for female and Black viewers with popular series like "Outlander" and "Power." As Starz prepares for its standalone journey, these strategic moves aim to position the company for success in its evolving landscape. The Lionsgate spinoff is scheduled for the first quarter, bringing about a new era for both Starz and Lionsgate.

"As Starz embarks on a transformative journey toward becoming a standalone publicly traded company, the announced layoffs, exceeding 10% of the workforce, and the strategic exit from Australia and the U.K. underscore the company's commitment to aligning its operations with growth priorities. CEO Jeffrey Hirsch's communication to staff emphasizes the necessity of these changes to position Starz favorably for its upcoming chapter.

The spinoff from Lionsgate, set for the first quarter, signifies a crucial turning point in the company's trajectory. As it streamlines operations and focuses on key markets, Starz aims to fortify its position in the competitive media landscape. The move away from Australia and the U.K. opens avenues for potential mergers or acquisitions, signaling an intentional strategic shift.

With a commitment to catering to diverse audiences through streaming services and popular series, such as "Outlander" and "Power," Starz looks ahead to a future characterized by independence and strategic growth. As Lionsgate and Starz prepare for separate paths, the industry awaits the unfolding narrative of these two prominent entities in the evolving landscape of entertainment."