Sky faces $47Mn hit from call center closures amid streaming struggles
LONDON, UNITED KINGDOM — Sky is set to incur costs of up to £35 million (US$47.7 million) as it shuts down three customer call centers, putting 2,000 jobs at risk.
The broadcaster, owned by Comcast, also reported fresh financial challenges with its loss-making SkyShowtime streaming venture, highlighting ongoing pressures in its European operations.
Restructuring comes at a high cost as profits decline
Although Sky reported an increase in its overall revenue level in its core operations, specifically from £10.1 billion (US$13 billion) to £11.2 billion (US$15.2 billion), it is not in as financially healthy a situation as it appears.
The earnings before interest, tax, depreciation, and amortization (EBITDA) remained flat at £1.2 billion (approximately US$1.6 billion), highlighting the challenges in achieving growth in a highly competitive media market.
The reorganization is an indicator that Sky is trying to simplify things; yet, the human cost, as well as the monetary implications, serve as reminders that there are challenges to running an efficient shop and maintaining a stable team.
Human toll of Sky’s layoffs
The move threatens 2,000 jobs, and these layoffs may leave thousands of employees facing financial instability and uncertainty of work opportunities.
Falling advertising revenues and large expenditures in growing its mobile telecommunications and broadband services have added to the liquidity, and closures signal a shift toward automation, raising questions about the quality of customer service and long-term job security in the telecom sector.
SkyShowtime woes compound Comcast’s European struggles
Sky’s joint streaming venture with Paramount, SkyShowtime, continues to weigh on its balance sheet, with the company registering a £245 million (US$334 million) impairment charge. This follows previous writedowns, including a £327 million (US$445.8 million) hit last year and Comcast’s $8.6 billion devaluation of Sky.
The streaming service’s underperformance has forced Sky to reassess its European strategy, including the recent sale of its German arm to RTL Group for €150 million (US$176 million).
Financial setbacks come despite Sky Group Chief Financial Officer (CFO) Simon Robson’s assertion that the company “delivered strong financial results during a year of meaningful strategic progress,” such as the launch of Sky Mobile in Ireland and Italy.
However, the persistent losses from SkyShowtime and shrinking profits suggest deeper structural issues. As traditional broadcasters face fierce competition from global streaming giants, Sky’s ability to pivot successfully—without further asset write-downs—remains uncertain.
