Comcast Corp. plans to cut jobs in its cable, broadband and wireless business and expects to take a charge of more than $1 billion in the fourth quarter. The Philadelphia-based company is trying to stem customer losses and streamline before it spins off NBCUniversal next year.
The company lost 144,000 domestic residential broadband customers in the third quarter, up from 91,000 a year earlier, it said Thursday. Revenue in its connectivity and platforms business fell 2.7% to nearly $19.7 billion.
Chief Financial Officer Jason Armstrong told investors on the company’s earnings call that the charge was related mostly to “transformation efforts.”
“We don’t look at it as a cost cutting exercise,” Armstrong said during the company’s fiscal third-quarter earnings call. “This is the ability to simplify in order to move faster, to be more nimble in decision making and, I think, really create capacity to invest for growth.”
Layoffs will be spread throughout Comcast‘s connectivity and platforms unit, which is the company that will remain after the separation. Employees at NBCUniversal are not expected to be targeted in this round, according to two people familiar with the matter who were not authorized to comment. Comcast had about 179,000 employees at the end of last year.
Comcast’s broadband business is under pressure from fixed wireless service sold by cellphone carriers and from satellite internet, including Elon Musk’s Starlink. The company has been responding by bundling mobile service. It added 368,000 wireless lines in the quarter. Its stock was down about 16% this year heading into Thursday.
“To be sure, Comcast has a lot of wood to chop before its broadband business returns to positive revenue growth,” veteran cable analyst Craig Moffett wrote in a report. “But it is our view that the pessimism about cable broadband has gone (much) too far.”
The growth came from the media side. Comcast’s content and experiences business earned revenue of $10.5 billion, up 6.5% from the previous year. That number was aided by the massive box office reception for Christopher Nolan’s “The Odyssey,” which has grossed nearly $1.8 billion worldwide. The film is Universal’s highest-grossing film ever, helping push its theatrical revenue up 76.6%.
The company’s theme parks business, however, had a softer quarter, with executives predicting that those trends could last into the first half of next year.
The company said in June that it would spin off its TV, film and streaming business into a separate, publicly-traded entity, which is expected to be completed next summer.
After the spin-off, Mike Cavanagh will become chief executive of NBCUniversal, and Comcast’s former chief financial officer, Michael Angelakis, will return to run Comcast.
Shares of Comcast closed Thursday afternoon at $22.84, up just over 3%.
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