Support Marketplace

Why the Comcast-Time Warner deal would mean layoffs

A Time Warner Cable truck.

The proposed merger between Comcast and Time Warner Cable announced this week has a lot of people wondering about customers' cable bills. But what about the two companies' thousands of employees? In typical corporate speak, Comcast says the deal will create about $1.5 billion in "operating efficiencies." Translation: layoffs are coming.

The companies will still need drivers and installers and sales reps in most of the same places. As Comcast CEO Brian Roberts put it, the companies don’t even operate in the same zip codes. Instead, a lot of the cuts will come at the top, says industry analyst Jeff Kagan.

"You only need one CEO, you only need one CFO, you only need one of all of the different heads of departments," Kagan says. "So there’s plenty of room for them to cut."

That doesn't mean layoffs aren't coming further down the chain, though. More and more people are cutting the cord and watching their TV on Netflix or online.

“I can’t imagine that there won’t be some cuts even at those lower levels, because we are talking about an industry that is under some threat,” says Batia Wiesenfeld, professor of management and organizations at NYU's Stern School of Business.

Wiesenfeld says the merger – if it goes through – may just speed things up, as management makes sure the new company is as lean as it needs to be, given shrinking customer demand.

About the author

Amy Scott is Marketplace’s education correspondent covering the K-12 and higher education beats, as well as general business and economic stories.

Comments

I agree to American Public Media's Terms and Conditions.
With Generous Support From...