Foxtel slashes jobs in fight for survival

Foxtel has made 200 employees redundant and will stand down another 140 staff members until the end of June as the News Corp-controlled pay TV operator scrambles to survive the coronavirus pandemic.

The job cuts were confirmed in an email sent to staff late on Wednesday by Foxtel chief executive Patrick Delany, who said the company had to "act now" to ensure it remained strong in the long-term.

Foxtel chief executive Patrick Delany said government restrictions were hurting the pay TV operator.Credit: James Brickwood

"Australia has experienced tough times before," Mr Delany wrote. "We know that in tough times Foxtel becomes a great source of comfort to people at home who want to be informed and entertained. Right now, with Australians isolating themselves at home, our customers need us more than ever.

"The government COVID-19 restrictions are however seeing major challenges for us including the broadcast and streaming of live sport," he added. "And looking ahead, the economic outlook for Australia is deteriorating and our continued transformation will become even more important."

In addition to hiring freezes, a halt on non-essential expenses and the release of casuals, contractors and freelancers, Mr Delany said the company had stood-down 140 staff and had made 200 people redundant.

Foxtel staff are not eligible for the JobKeeper subsidy but Mr Delany said some staff may be eligible for payments under the JobSeeker scheme. Those made redundant will receive all entitlements and staff continuing with the business will work reduced hours.

The pay TV operator had already been battling fierce competition from online streaming services including Netflix and Disney+, however the suspension of sports codes had added additional pressure to the business. The company has recently been offering major discounts to customers who had threatened to cancel their subscriptions due to the lack of sport available on the platform

"We need to be prepared for a scenario in sport where season starts are delayed further. It is clear all codes are struggling with significant financial challenges and we should anticipate that the future shape of sport in Australia will be very different," Mr Delany said.

News Corp Australia, which owns 65 per cent of Foxtel, last week announced plans to halt print production of 60 community titles including Manly Daily and Wentworth Courier because of rapid declines in advertising revenues caused by the COVID-19 pandemic. The company's executives are also taking a pay cut, asking staff to reduce hours and take annual leave in a bid to reduce costs.

Media companies have been forced to withdraw earnings guidance, cut costs and raise capital to survive as advertising spending and cancellation of major sports competitions hurt their bottom line. Nine Entertainment Co, publisher of this masthead, Seven West Media, Southern Cross Austereo and oOh! Media have all introduced measures to help survive through the pandemic.

Broadcasters and publishers have also been lobbying the federal government for relief. Requests include removal of spectrum licence fees, forbearance of content quotas, subsidisation of news operation costs and the imminent introduction of a commercial arrangement between publishers and digital platforms Google and Facebook. While the government this week announced the release of $5 million in funding for small and regional publishers, no major announcement related to the sector has been made.