Redbox, which left last year through SPAC, said it will lay off 150 employees, about 10% of its workforce. In the filing with the SEC, the company said it had “a number of possible strategic alternatives to the company’s corporate or capital structure.”
According to the document, it is the “current side effects” of Covid that are to blame.
With a nationwide network of originally familiar red kiosks operating in thousands of retail outlets such as supermarkets and grocery stores, the 20-year-old Redbox has expanded significantly. Building on the resources created by the merger and subsequent IPO with Seaport Global in 2021, it stepped up its recently launched transmission operation. It also added a production and acquisition group called Redbox Entertainment, whose goal is to release dozens of movies, mostly genre titles. It reached a distribution agreement with Lionsgate last October.
The layoffs went into effect on March 29, according to several new SEC documents. The action will reduce annual operating costs by approximately $13.1 million, but will also be subject to a one-time restructuring fee of $3.8 million primarily to cover the exemption.
According to the documents, the pandemic hit Redbox in 2021, and the company has also seen an increase in contextual and marketing costs associated with the entertainment group.
The company warned SEC regulators that its annual report would be delayed due to restructuring and cost-cutting efforts. On January 28, the company used the last available funds on a revolving loan. “The increase in spending in the fourth quarter of 2021 was not offset by revenue growth,” the statement said.
Redbox said it was “actively taking steps to reduce monthly expenses, reduce capital expenditures and increase revenue.” It also “explored a number of possible strategic alternatives to the corporate or capital structure of the company and is seeking financing to finance operations and one-time restructuring costs.”
Source: Deadline
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