Sky will cut 1,000 jobs due to the shift from traditional satellite pay TV to streaming services. This is the latest round of redundancies that has hit the UK media sector.
The company employs around 26,000 people in the UK and is looking to reduce their workforce by 4%.
Cuts will be made primarily by its army of installers who install equipment at homes. The number of employees is expected to drop by about a quarter as consumers switch to internet-based plug-and go products like SkyStream and Sky Glass smart televisions.
Sky estimates that three quarters of the new products are now internet-based. This reduces the need for installers.
Sky’s decision comes just days after Channel 4 announced that it would cut its headcount by as many as 240. This is the largest round of cuts made since 2008. The move was a response to the decline in TV advertising, which has led to an acceleration in its plans to be a digital first broadcaster.
Sky has been hit by the recession, even though it is less dependent on advertising than broadcasters like Channel 4 or ITV. These companies are also expected to announce a programme of job cuts in the next few weeks.
Comcast, the US media giant, acquired Sky in 2018 for £32bn, including its operations located in Germany and Italy. Comcast wrote down $8.6bn on Sky two years ago due to growing concerns about the economy as the cost-of-living crisis started to affect consumer spending.
Sky reported a decline of 13% in revenue to $4.42bn, or £3.48bn. However, currency fluctuations were a major factor.
Sky spokesman said that the launch of Sky Glass & Sky Stream marks a change in Sky’s business model, which now delivers TV via IP (an internet connection) rather than satellite. Sky Glass and Sky Stream are increasingly popular because they don’t need specialist installation. This has caused us to reduce the number of staff we require to deliver our service.
Sky isn’t the only media or telecoms company looking to reduce its staff.
Last year, BT announced that it would cut its workforce to as little as 55,000 employees by 2030. This is more than 40% of their global workforce.
Vodafone will cut 11,000 jobs by 2025 from its global workforce, which is more than 10% of the 104,000 employees worldwide. This is the biggest round of job cuts in the history of the struggling telecoms group.
Sky, now part of the Universal Film Studio group, continues to recruit in its growing areas. The company plans to create 2,000 jobs in 2021 at its new Elstree studio complex.