Shares of AMC Networks Inc. slid in Tuesday trading after the media company announced the surprise departure of its chief executive and said that it plans to conduct layoffs that could affect roughly 20% of its employees.
Christina Spade, who took over as CEO in September, has stepped down from that role, and the board of directors “is currently finalizing who it will name as a replacement,” according to a Tuesday morning press release.
“No rationale was given by the company for the exit, which leaves any number of potential reasons, both personal and operations-related,” Cowen & Co. analyst Doug Creutz wrote in a note to clients shortly after the announcement. “We expect this news to pressure shares unless and until the company finds new leadership and can reassure investors that Spade’s exit was not related to any financial-related issues.”
shares closed down 5.3% in Tuesday trading, after being off as much as 10.6% earlier in the session.
The news comes amid a tough stretch for the media industry as companies navigate cord-cutting pressures on their traditional operations and manage the shift toward streaming. The Wall Street Journal reported Tuesday that AMC Networks was planning to lay off roughly 20% of its U.S. staff, as momentum in streaming hasn’t been enough to offset the pain brought on by cord cutting.
AMC Networks confirmed the plans in a statement to MarketWatch.
“Due to pressures in our industry as well as a challenging economic environment, we have determined we need to conserve resources at this time,” the company said. “We are confident these steps will enable AMC Networks to come through this period even stronger and to be well positioned to drive future growth over the long term.”
In switching up its leadership, the company follows Walt Disney Co.
which announced earlier this month that it was bringing back Bob Iger, its former CEO, to once again lead the media giant.