About 90 people in El Paso are going to find themselves without a job in March as job cuts at DISH Network Corp (NASDAQ:DISH) roll through following a decrease in demand for satellite television offerings across the U.S. The Dish Network layoffs will be part of Dish’s manufacturing division layoffs, shedding workers from the Dish Network facility in El Paso. These Texas layoffs are likely the result of a steep Dish Network subscriber decline, as online streaming and other alternatives have come to take the place of satellite services.
The Dish Network job cuts are slated to begin on March 18 in El Paso, where workers refurbished customer equipment for the satellite TV provider.
John Hall, a spokesman at Dish’s headquarters in the Denver area, saidthat the Dish Network layoffs in Texas would impact 90 of about 1,600 people at its El Paso facility, with most of those employees working at the Dish call center, which was untouched by the cuts. The exact number of Dish Network manufacturing division layoffs was undisclosed.
Hall did say that the company is cutting one of three work shifts in the manufacturing division because demand for its equipment-refurbishing services, “has decreased with the introduction of new customer-service technologies, upgrading customers to newer equipment, and retiring older equipment.”
“All affected employees will have two months to prepare and during that time we will make resume and interviewing assistance available. We also will be inviting other local companies to conduct job fairs at our site.”
The Dish Network layoffs come at a time when the company is finding itself in need of a new strategy going forward in order to adapt to changing consumer behavior. The company had 13.2 million pay-TV subscribers at the end of September, which is down from the 13.6 million a year ago. Sales registered at about $15.1 billion, with a profit of $1.5 billion in 2016.
Despite the announced Dish Network layoffs coming to El Paso, the city has otherwise experienced its lowest unemployment rate in decades, making it one of the more prosperous communities in the U.S. in terms of employment. The county has an unemployment rate of 3.7%, lower than both the Texas average (3.9%) and the national unemployment rate of 4.1%.
Dish Network’s Revenue Declined in 2017 due to Cord-Cutting
DISH Network Corp has not had an easy go of it in the past few years. As more and more Americans are cutting the cords, a Dish Network subscribers decline has taken place, albeit a rather modest one.
But despite only a few percentage points of its total customer base deserting the company, more worrying is the revenue the company is earning per customer. Dish’s revenue per user dropped from $89.44 to $87.23, a 2.5% decrease in the third quarter.
Meanwhile, the company has tried to combat the cord-cutting effect by offering a streaming service of its own, “SlingTV.” That package costs $20.00 per month and is significantly lower than the traditional Dish satellite TV packages.
The combination of fewer subscribers, coupled with the lower revenue per remaining customers, has put the company on a downward trend, with four consecutive quarters of year over year revenue decline.
And the challenges facing Dish are unlikely to change. Market research company eMarketer Inc predicts that 22 million U.S. adults will also partake in cord-cutting, compared to 16.7 million who did so last year, for an increase of 33%.
Should the market continue to punish the company, then more Dish Network layoffs in the future are possible.
One strategy the company has employed is to focus on newer innovations like the “Internet of Things,” and many analysts see much of the valuation in the company stemming from its future plans in that sector. At the moment, however, the company has yet to monetize that part of its business, and as such, still has to contend with a shrinking subscriber base and a falling revenue from the customers it does retain.
“Dish Network laying off 90 people at El Paso facility,” El Paso Times, January 29, 2018.
“Why DISH Network Corporation Sank 18% in 2017,” The Motley Fool, January 11, 2018.
“Dish Network’s Revenues Likely To Fall As Subscriber Losses Continue,” Forbes, November 7, 2017.