DirecTV notes the layoffs of hundreds of employees, citing the “secular decline” of pay TV

DirecTV is laying off hundreds of employees, most of them executives, in a downsizing spurred by cable cutting.

Most of the layoffs will affect company executives, who make up just under half of the company’s workforce, according to a person familiar with the move. About 10% of all drivers in a total workforce of about 10,000 are affected. Workers were informed last week of the cuts, which will take effect on January 20.

AT&T spun off the satellite TV operator in 2021. It is now a private company controlled by AT&T and TPG, with the private equity firm owning a 30% stake.

“The entire pay-TV industry is affected by the secular decline and rising rates of securing and distributing programs,” a company spokesperson said in a statement. “We are adjusting our operating costs to reflect these changes and will continue to invest in new entertainment products and service improvements.”

DirecTV’s business includes the primary satellite service, the U-verse cable system and the DirecTV Stream delivered over the Internet. As a private company, it doesn’t report subscriber numbers, but the industry-wide trend has been declining over the past decade. A recent estimate by the Leichtman Research Group found that 66% of homes have some form of pay TV, up from 79% in 2017.

The program costs – long the bane of all distributors – continue to rise despite the number of subscribers. DirecTV, which introduced the NFL Sunday Ticket package in 1994, chose not to renew it after years of losses. YouTube TV earmarks around $2 billion a year for these rights.

The shrinking of the traditional pay-TV customer base across the board has led to hard-line calls from Dish Network Chairman Charlie Ergen for state regulators to allow a merger between Dish and DirecTV. EchoStar (which previously ran Dish) and DirecTV tried to merge in 2002 before the Justice Department filed a lawsuit blocking the deal.