Job cuts at Sky: Up to 250 roles could be affected

New Sky chief executive Martin Stewart has already cleaned out the senior management team, and switched focus to streaming. Now rank-and-file staff are in the spotlight. Photo / Doug Sherring

Sky confirms it is embarking on a restructure that will see job cuts - but says the exact number is up in the air.

Word of the restructure was initially leaked to the Herald.

The pay-TV provider currently has 1137 permanent staff plus around 500 contractors.

"We're having honest conversations with our people about the way we are structured and new ways of working, and if the proposals go ahead they will have an impact on some roles and the overall team size," external relations director Chris Major says.

"We're talking with all of our people who are involved in delivering technology, which is around 250 people."

Potentially, that could call for a whole scrum of support clowns, but Major adds, "The conversations are about the ways we work and how we organise ourselves to be more customer-focused, data-driven and effective, and we don't yet have decisions on how many roles are impacted."

The consultations will take place over the next fortnight, with no timeline yet for "the next phase".

There has been industry chatter about marketing and publicity department job cuts, but Major says in that area it's a case of some rebalancing.

"The main growth is in our social teams, and Steve [new chief marketing officer Steve Bayliss] is building a new sport marketing capability. There's also growth in teams supporting Sky's streaming services from a marketing perspective, and a downsizing of publicity and admin functions."

Sky's total staff number has remained close to its satellite heyday levels (it 1159 last year and 1223 in 2017) even as its fortunes have sunk over the past three years.

And numbers at the top end have also remained relatively static, with the company reporting 289 staff earning more than $100,000 in 2018 and 283 above that threshold this year (in 2018, TVNZ reported 212 earning more than $100,000).

Rising new threats from the likes of Netflix, Spark and piracy have hit Sky's bottom line over the past few years, with profit and subscriber revenue falling and its dividend disappearing altogether.

New chief executive Martin Stewart, who took the reins in February, cleaned out most of the existing senior management team and the company wrote off $38m as he cancelled a planned decoder upgrade in favour of a new focus on streaming.

The number of Sky Sport channels has been expanded, an upgraded sports streaming app (now called Sky Sport Now) has been released , global streaming player Rugby Pass has been acquired in a deal worth up to $62m, and Stewart has flagged a determination not to lose any more sports rights.

Analysts have given Stewart largely good notices - Fat Prophets' Greg Smith seeing its shares rebounding to $2 in the next 12 to 18 months (if it can keep Sanzaar rights)

And there were early signs of promise at Sky's 2019 full-year report last month, as the number using streaming services Neon and Sky Sport Now grew faster than its satellite business fell, yielding the first overall gain in sub numbers in three years (if less revenue per sub, since streaming services are far cheaper).

SKYTV

Investors have yet to be convinced, however. Sky's shares, which have lost 80 per cent of its value over the past three years, were recently trading at $1.14, close to their all time low.

Major says Sky will push harder into streaming and that "changes to the ways we work and the mix of capabilities in our teams," are part of that drive.

"We're determined to retain our role as the leaders in the NZ sport and entertainment experience market. We have a single-minded focus on delivering to customers in ways that work for them," she said.

"To do this, we need to look at current capability, and be organised in a simpler way that helps us to move fast, be data-driven, customer focused and collaborative. In the highly competitive world of entertainment we need to be as fit and efficient as possible to bring New Zealanders the best of local and international content at a price they can afford.

"We're looking at what Sky needs from a technology perspective, both internally and externally, and talking with our people about what change would be required to align with our renewed commitment to our customers and to lift our game in the digital space"