US satellite radio service SiriusXM is planning to reduce its headcount as the company’s revenue growth slows further.
The satellite radio service controlled by billionaire John Malone warned of potential job cuts in a November 28 town hall with employees as the company assesses ways to pare costs and boost efficiency, Bloomberg News reported December 1, citing people familiar with the matter.
“It may indicate the need for staff reductions,” management reportedly said at the time.
As of the end of 2021, SiriusXM had 5,590 full-time and part-time employees. The report could not determine how many jobs are affected in the planned layoffs. In 2021, the company trimmed its headcount by about 2.4% from 2020, according to the company’s 2021 annual report.
SiriusXM Chief Executive Officer Jennifer Witz is reportedly planning to reduce costs in preparation for any potential economic downturn.
“We expect continued uncertainty around macro factors and recessionary trends impacting the broader economy in the coming months to dampen the digital audio ad market,” Witz told analysts during an earnings call in November.
News of the company-wide Zoom meeting where management hinted about the potential job cuts was also picked up by Billboard.
Witz reportedly said that the company is reviewing “where there is room for improved efficiency.”
“The results of this review will highlight the other areas where we may need to reduce spending, and it may indicate the need for staff reductions… In the meantime, we need to closely evaluate our hiring needs and be purposeful in prioritizing roles that align with our strategic initiatives,” Witz was quoted by Billboard as saying in notes from the call.
The reported layoffs come as SiriusXM suffers from slowing sales after its new listeners in the automotive industry shrank to about 7 million in the third quarter.
“SiriusXM’s new and used car trial starts were both down 4% sequentially as auto industry sales continue to remain soft and vehicle prices remain near record highs,” SiriusXM Chief Financial Officer Sean Sullivan said during the company’s Q3 earnings call.
Sullivan warned at the time that analysts expect the trend to continue as the seasonally adjusted annual rate estimate has fallen to 14.8 million from 16.6 million.
“We anticipate that continued softness will continue to impact the trial funnel and self-pay net adds into Q4 and into next year,” the executive said.
SiriusXM, the home of Howard Stern, reported a 4% year-over-year growth in Q3 revenue to $2.28 billion. Q4 revenue growth is expected to slow to just 1%, according to Bloomberg analysts.
While the group’s self-pay subscribers increased by 187,000 to 32.2 million at the end of Q3, its paid promotional subscribers decreased by 49,000.
Another weak link in SiriusXM’s recent financials is declining advertising budgets.
Advertising revenue in Q3 “remained relatively flat as macroeconomic factors resulted in a deceleration in ad spending late in the quarter,” Witz said during the group’s Q3 earnings call.
If the reported job cuts are confirmed, SiriusXM, which now owns Pandora, would be the latest company to slash its headcount due to macroeconomic concerns and fears of a potential recession.
Amazon’s layoffs are now reportedly expected to affect up to 20,000 staff including top managers. Facebook parent company Meta said it is axing around 13% of its global workforce and extending its hiring freeze through the first quarter of 2023, while TikTok parent ByteDance was reported to have started laying off some of its staff in the US and Europe.
Music Business Worldwide