Last month, Hollywood conglomerate Endeavor announced in an internal memo that it planned to lay off 250 staff members from across its various subsidiaries, mostly from operational roles that could not be performed from home.
Yet despite the company’s efforts to limit its financial losses, it appears that the company will see one-third of its 7,500 employees impacted by either pay cuts, furloughs, or lay offs. The vast majority will be furloughs or reduced roles.
The news was announced by Variety.
Endeavor — a company that includes subsidiaries such talent agency WME IMG, On Location Experiences, Miss Universe Pageant, Professional Bull Riders, and the Ultimate Fighting Championship (UFC) — is saddled with a 4.6 billion debt burden owed to Silver Lake Partners and other private equity investors over the purchase of the UFC in 2016. Unable to proceed with their live events schedule due to the COVID-19 global pandemic, the organization is now struggling with its high debt load and limited revenue sources.
According to the report, the cuts will affect “every division of Endeavor’s core business, including talent agency WME at every level of that company, and portfolio holdings including live events company IMG.”
“The long-term prospects for Endeavor remain unchanged, but like other companies, we are taking a variety of actions to mitigate the impact of this pandemic,” a company spokesperson said. “Since late March, we have been rolling out cost-saving measures in phases across our companies and geographies and intend to complete most of this process in late May. Approximately a third of our population will be impacted by reduced pay for reduced work, furlough, or position elimination, with the majority affected by reduced work and furlough.”
It remains unclear whether the extensive cuts will impact the UFC, which has seemingly managed to avoid any staff cutbacks so far. The cuts are expected to mainly impact WME’s motion picture and TV departments but that does not mean other divisions and subsidiaries will not see cuts as well.
The UFC reaped a reported $900 million in revenue in 2019 (only 16% of which was paid out to fighters). However, given that the promotion is unable to proceed with its regular live events schedule for the foreseeable future, Endeavor has lost yet another important source of revenue at a crucial time.