ESPN to cut 500 jobs as COVID-19 erodes revenues

ESPN is slashing 500 jobs as cost pressures from the COVID-19 pandemic are accelerating the sports media company’s move into streaming.

The cuts, which include 300 layoffs, were revealed Thursday in a memo from Jimmy Pitaro, president of the Walt Disney Co.-owned unit. In addition to the layoffs, another 200 open positions will be eliminated, the company said. ESPN has more than 5,000 employees worldwide.

“Prior to the pandemic, we had been deeply engaged in strategizing how best to position ESPN for future success amidst tremendous disruption in how fans consume sports,” Pitaro said in the memo viewed by the Times. “The pandemic’s significant impact on our business clearly accelerated those forward-looking discussions.”

The company, based in Bristol, Conn., did not specify which areas would be affected, but people familiar with the plans who were not authorized to discuss the matter publicly said the cuts would be across different departments.

The memo did not specify when the layoffs would take effect, but said employees “will be learning about their future” over the next few weeks.

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ESPN lost a massive amount of its programming this year as the shutdown related to the coronavirus crisis truncated its lineup of NBA, Major League Baseball and other sports. The NBA Playoffs were moved into the fall, putting them in competition with other events which cut into their ratings.

Pitaro’s memo noted that the company had already taken cost-cutting steps such as executive and talent salary reductions, furloughs and budget cuts.

At the same time, the lockdowns that have occurred as the country deals with rising COVID-19 infections have driven more consumers to streaming services, speeding up the transition away from traditional television.

ESPN has successfully launched a streaming product — its service ESPN+ has 8.5 million subscribers — but still gets the bulk of its revenue from fees paid by cable and satellite operations that carry its channels.

Cord-cutting and a shift by younger consumers away from TV subscriptions continue to erode that revenue source. Households with pay TV, most of which carry ESPN, have been on a steady decline from their peak in 2010.

Pitaro has previously said that the company is moving toward serving the streaming audience and that ESPN will be prepared to serve viewers as they shift to new viewing platforms.

The cuts are the latest within Walt Disney Co, which has been buffeted by the health crisis.

The Burbank-based company in September said it would lay off 28,000 domestic employees at its parks, experiences and products division, which includes Disneyland Resort and Disney California Adventure Park in Anaheim and Walt Disney World in Orlando, Fla.