ESPN, the largest sports network in America, laid off a large portion of its staff Tuesday. The sports giant has not announced how many employees were let go, but unofficial reports from Deadspin suggest that as many as 400 may be gone out of the company's roughly 7,000 employees. Most ESPN staff work at the headquarters in Bristol, Conn.
“We are implementing changes across the company to enhance our continued growth while smartly managing costs,” ESPN representatives told the Associated Press in a statement. “While difficult, we are confident that it will make us more competitive, innovative and productive.”
“I was laid off from ESPN today after nine and a half years. Completely out of the blue, no warning at all,” an anonymous former employee told Deadspin. “I was told it was 10 percent across the board, which would be roughly 400. I was told the reason was they needed to make their profit margin and they chose to do that via layoff of staff.”
The axed staffer reports that all the employees let go Tuesday will be paid through the end of July and will get a severance package of two weeks for every year worked at ESPN. Employees are reportedly allowed to continue working until the end of the week.
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ESPN’s layoffs of such a large number of employees came as a surprise to many. The network is a subsidiary of media giant Disney (NYSE:DIS), which is doing extremely well financially. This past fiscal quarter, Disney posted a 32 percent gain in net income and Disney stocks have risen to an average of $72 per share.
Those financial gains haven’t stopped Disney from other layoffs, however. Last month, Disney announced that it was laying off virtually the entire staff at LucasArts, the video game development studio owned by Lucasfilm. Disney purchased “Star Wars” production company Lucasfilm for a stunning $4 billion last year.
In place of LucasArts, Disney has opted to simply have video game giant Electronic Arts develop further “Star Wars” games. If the LucasArts layoffs are an example of Disney’s overall policy, the media giant may be trimming staff all over.
It’s equally likely that ESPN itself may be suffering financial difficulties while its parent company prospers. In recent years, broadcasting rights to major sports events have jumped to astronomical highs. Last November, ESPN announced a $470 million annual contract to televise college football playoffs. At the same time, the AP reports that advertising income has slipped thanks to viewers watching games online and on DVRs.
Disney stock closed at $65.83, down 29 cents, Tuesday.