Satellite radio firm SiriusXM has announced a reduction in its employee count, in line with the overall trend among tech companies firing workers in the past few months.
“After a review of our business, we have made the decision to reduce the size of our workforce by 475 roles, or 8 percent,” CEO Jennifer Witz said in a March 6 press release. “This was not an easy decision to make, nor one we took lightly. However, it is critical for us to take the right steps now to secure the long-term health and profitability of our business.”
As part of the company’s efforts to reduce costs, SiriusXM has already decreased its real estate footprint, cut down its content and marketing budget, as well as implemented stricter restrictions on its travel and entertainment policy.
The 8 percent reduction of the workforce is necessary to “maintain a sustainably profitable company,” SirusXM said. The New York-based company employed 5,869 people as of the end of 2022 according to data from MarketScreener.
Financial Performance and 2023 Guidance
In 2022, SiriusXM had met its financial guidance, bringing in revenues of $9 billion, up 4 percent year-over-year. Net income for the year was recorded at $1.21 billion, down from $1.31 billion in 2021. Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) came in at $2.83 billion, up 2 percent. The company also added an estimated 348,000 subscribers for the year.
However, in its 2023 guidance, the company projected revenues to remain flat at $9 billion, with EBITDA falling to $2.7 billion. It also held a negative view about adding more subscribers.
“While we are not issuing subscriber guidance today, we anticipate modestly negative self-pay net adds for the year as economic and demand uncertainty persists, auto sales remain soft, and we reduce marketing ahead of our planned launch of a new streaming experience later this year,” said Sean Sullivan, Chief Financial Officer, according to its Feb. 2 earnings release (pdf).
While Witz said that she expects the company to generate “significant cash” and deliver “strong operating performance” for the year, she admitted that the firm will be facing a “challenging economic environment.”
In January, music streaming platform Spotify had announced it was cutting down its global workforce by 6 percent as a cost reduction measure.
Mass Layoffs
Multiple firms have announced employee layoffs this year. Alphabet, which owns Google, announced a workforce reduction of 12,000 employees. Microsoft plans to lay off 10,000 employees this year.
Amazon announced 18,000 terminations, amounting to around 6 percent of the company’s global corporate workforce. In January, IBM announced a headcount reduction of 3,900 employees.
According to a Feb. 2 report by employment analytics firm Challenger, Gray & Christmas, Inc., 102,943 workers were laid off in the United States in January 2023, which is more than twice the terminations in December 2022. It is also 440 percent higher than the January 2022 layoffs. The tech sector alone made up 41 percent of the terminations.
“We’re now on the other side of the hiring frenzy of the pandemic years,” said Andrew Challenger, senior vice president of Challenger. “Companies are preparing for an economic slowdown, cutting workers and slowing hiring.”
While thousands of Americans are becoming unemployed, a survey by Morning Consult published last month showed a disparity in how the younger and older generation view the mass layoffs.
“Sixty percent of Gen Z adults said recent mass layoffs were avoidable based on the current economic environment, while more than half (52 percent) of millennials said the same,” according to the survey. Among baby boomers, only 43 percent considered the layoffs were avoidable.
