DirecTV to Slash Jobs, Citing Weak Economy

DirecTV, the television satellite company that is being courted separately by News Corp. and EchoStar Communications Corp., said Thursday that it plans to cut jobs by an unspecified amount starting this month, citing the overall slowing economy.

But the company, which is owned by General Motors Corp.’s Hughes Electronics Corp., said it still expects to meet its current expectations for cash flow, revenue and subscriber additions for the quarter and the year.

“We’re not immune to the sagging economy and the decline in business overall,” a DirecTV spokesman said. “But we are sticking by our guidance. This is part of a number of steps to boost our cash flow and improve our margins.”

The job cuts, which are expected to begin this month and continue through the end of the quarter, will come from the corporate side and not the customer service side, he said. The exact number of job cuts has not been determined.

He said cost savings, which he declined to quantify, would not kick in until 2002. He declined to comment on whether the unit would take a restructuring charge.

Shares of Hughes, which trades as a GM tracking stock, closed at $19.33, down 11 cents, on the New York Stock Exchange.

The job cuts are the latest in a series of woes for Hughes. DirecTV, which has more than 10 million subscribers, cut its 2001 estimate for net subscriber additions twice this year. It expects to add 1.1 million subscribers this year. In June, it had expected to add 1.5 million to 1.7 million subscribers.

The company acknowledged in June, when it lowered DirecTV’s subscriber guidance for the first time, that it allowed itself to be distracted by the impending takeover.

GM has been looking at a number of options for the unit since November in an effort to generate cash. Rupert Murdoch’s News Corp. has pursued a deal with Hughes in hopes of getting a U.S. component for its Sky Global network of satellite TV services.