Sky blames economy for 1,200 Italy job cuts

Sky Italia has announced that it will shed a further 800 positions, on top of 400 already announced, as the economic crisis begins to bite.

The pay TV company disclosed the job cuts – or a redefined transformation plan, to use its own terminology – in its annual meeting with union representatives on Friday.

The unions were quick to respond publicly to the plan, and funnily enough have some concerns. They are leaning heavily on Sky to go for reskilling efforts rather than redundancies, while at the same time warning of a structural crisis in the overall sector: streaming platforms are suffering at the hands of OTTs, they say, pointing to the need for regulatory intervention.

Sky presented “a broad upskilling, reskilling, insourcing and voluntary exit plan, which became necessary in light of the impacts on the business brought about by changes in the macroeconomic scenario over the past year,” it said (in Italian). The firm had a “particularly difficult year,” last year, it said.

Indeed, the operator lost customers in Italy last year, according to parent company Comcast’s annual report, and although it did not share actual figures, Advanced Television claims that the losses came in at 300,000, reducing the firm’s direct-to-consumer base to 4.1 million. Average revenues in Italy were also down, Comcast said.

“The redefinition of the transformation plan foresees an impact on 800 additional resources, including internal and external workers, in addition to the 400 job positions already foreseen in the agreement signed with the social partners in 2021,” Sky Italia confirmed.

Naturally, Sky’s announcement leans heavily on the potential for retraining, reskilling and insourcing, and a joint statement from some of Italy’s major unions makes it clear that those are their preferred options too. Or rather, the only options they will countenance.

“The workers concerned will have to choose between an incentivised voluntary exit (up to the capacity of the company budget allocated for exits), or a professional reconversion towards the activities that will be re-internalised over two years,” reads a statement from SLC CGIL, Fistel CISL and UILCOM.

A reorganisation involving 1,200 people – internal and external staff – out of a workforce of just over 4,000 could be disruptive if the tools already in place are not used effectively, they said. Indeed, the unions note that that for several years they have worked with Sky to manage such situations, starting first with the retraining of staff at a time of deep technological change.

“For us there is no room, in this company as in the rest of the sector, for different choices to what has been done up to now,” they said, echoing last week’s statement from Fistel CISL on job losses at Vodafone Italia. They added that they will work to ensure that reinternalisation and reskilling are actually properly on the agenda at Sky and not just “simply an attempt to buy a bit of time before turning to a more drastic solution.”

That’s largely what one would expect the stance of the unions to be. But in addition, they had some interesting comments to make on the state of the pay TV sector in general.

“We are evidently facing a structural crisis in the sector, exacerbated by the arrival of streaming platforms, whose economies of scale together with economic strength and almost complete lack of labour cost in our country, are testing the very existence of traditional broadcasters,” they said.

“A crisis which, in absence of regulatory intervention capable of rebalancing the competitive advantage torn away by streaming platforms, risks bringing the whole sector to its knees, at least judging by the trend in advertising revenues, which are becoming ever more unbalanced in favour of the OTTs,” they said.

The unions may have a valid point. But the likelihood of any meaningful regulatory input seems slim.

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