Redbox lays off 10% of workforce, considers ‘a number’ of ways to cut costs, citing pandemic toll – Deadline
Redbox, which went public via a SPAC last year, said it would lay off 150 employees, or about 10% of its workforce. In a filing with the SEC, the company said “a number of potential strategic alternatives with respect to the corporate or capital structure of the company.”
The “continuing adverse effects” of Covid are to blame for the measures, according to the filing.
Originally known for its nationwide network of bright red kiosks, which still operate in thousands of outlets like grocery stores and convenience stores, the 20-year-old Redbox has grown significantly. Building on the resources produced by the 2021 merger with Seaport Global and subsequent IPO, it has ramped up its recently launched streaming operation. It also added a production and acquisition arm, Redbox Entertainment, which sought to produce dozens of films, mostly genre titles. Last October, he struck a distribution deal with Lionsgate.
The layoffs took effect March 29, according to several new SEC filings. The action will reduce annual operating costs by approximately $13.1 million, but will also result in a one-time restructuring charge of $3.8 million, primarily to cover severance payments.
The pandemic hammered Redbox in 2021, the filing notes, and the company also saw increased marketing and context costs related to its entertainment arm.
The company has warned SEC regulators that its annual report will be filed late due to ongoing restructuring and cost-cutting efforts. On January 28, the company dipped into the last funds available through its revolving credit facility. “Increased costs during the fourth quarter of 2021 were not offset by increased revenue,” the filing clearly revealed.
Redbox said it has “actively taken steps to reduce monthly costs, delay capital expenditures and increase revenue.” It also “explored a number of potential strategic alternatives with respect to corporate or corporate capital structure and sought financing to fund operations and one-time restructuring costs”.