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(qlmbusinessnews.com Wed, 31st Jan, 2024) London, UK —
“Facing the Future: Sky Announces 1,000 Job Reductions Amid Digital Transformation”
Sky, one of the UK's leading media companies, is set to slash approximately 1,000 jobs as part of its efforts to adapt to changing consumer preferences, particularly the growing trend towards internet-based streaming services. The job cuts, which represent about 4% of Sky's UK workforce of around 26,000 employees, are expected to primarily affect workers involved in installing equipment in homes.
The move comes as more consumers opt for plug-and-go internet-based products like Sky Stream and the Sky Glass smart TV, resulting in a reduced demand for traditional satellite pay-TV services. Sky estimates that approximately three-quarters of its new product subscriptions are now internet-based, leading to a decreased need for installers.
This announcement follows Channel 4's recent confirmation of plans to reduce its headcount by 240, marking the broadcaster's largest round of cuts since 2008. The media industry as a whole has been grappling with challenges such as the decline in TV advertising revenue, prompting companies to accelerate their transition towards digital-first strategies.
While Sky's business model is less reliant on advertising compared to traditional broadcasters like Channel 4 and ITV, it has still felt the impact of the industry downturn. Following its acquisition by US media giant Comcast in 2018, Sky experienced an $8.6 billion write-down two years later, reflecting concerns over the economic outlook amid the cost of living crisis.
Sky's revenue decline of 13% in the final quarter of last year was partly attributed to currency fluctuations but also underscores the broader shift towards internet-based TV delivery. The company's spokesperson highlighted that the launch of Sky Glass and Sky Stream signifies a strategic move towards delivering TV content over IP (internet protocol), eliminating the need for specialist installation.
While the job cuts reflect Sky's efforts to realign its workforce with its evolving business model, the company continues to invest in growth areas. In 2021, Sky announced plans to create 2,000 new jobs at its Elstree studio complex, underscoring its commitment to expanding its presence in the entertainment industry.
As Sky navigates the changing media landscape, these job cuts signal a broader industry-wide shift towards digital platforms and streaming services, reshaping the way content is delivered and consumed in the UK.
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