Tuesday, 11 May 2021

Sky Italia to cut a quarter of its workforce

by Harry Baldock, Total Telecom
Monday 12 April 21

The decision comes as part of a four-year reorganisation strategy to streamline their operations as domestic competition grows fiercer

On Friday, Sky announced that its Italian business would be cutting down its Italian workforce by a quarter, including contractors, as part of a major reorganisation plan for the next four years.  Sky Italia currently employs around 11,000 people in Italy, with around 5,000 of which being direct employees. Under the new plan…

On Friday, Sky announced that its Italian business would be cutting down its Italian workforce by a quarter, including contractors, as part of a major reorganisation plan for the next four years. 

Sky Italia currently employs around 11,000 people in Italy, with around 5,000 of which being direct employees. Under the new plan, around 2,750 people will thus be made redundant in the coming years. 

According to unions, who broke the news, the move is expected to yield savings of around €300 million, with redundancies delivered via agreements with unions, as opposed to unilateral action.

Despite being the country’s top pay-TV player with around 5 million subscribers, Sky Italia has been facing stiff competition in Italy for a number of years now, with the likes of Netflix and Amazon Prime growing in popularity, especially throughout lockdown, to challenge their previous dominance. 

A further major blow came recently in the form of streaming service DAZN winning the rights to stream the hugely popular Serie A football matches, Italy’s top league, for the 2021–2024 period. DAZN, which only entered the market in 2018, won the rights following a €2.5 billion bid, beating out Sky Italia’s own bid of €2.25 billion. At the time, there were rumours of a sublicensing deal being arranged with Sky, but these have since been dismissed.

“We were competitors until the other night. There are no conversations in progress,” said DAZN’s chief customer and innovation officer Veronica Diquattro at the end of last month. 

For Sky Italia, the loss of the football rights could lead to a significant portion of their subscriber base jumping ship, something which has directly impacted the company’s decision to streamline its workforce, according to the unions.

"The loss of soccer broadcasting rights related to the Serie A championship leads the company to concentrate further on direct productions,” said the unions in a statement. 

With the economic pressures of the coronavirus only beginning to be understood by the global economy, Sky Italia’s loss of the football rights has left it in an unenviable position, seemingly under seige by rivals, both new and old.

 

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