Redbox Entertainment, which operates a national network of DVD-rental kiosks and a streaming-video business, said it laid off 150 employees, roughly 10% of its total headcount.
The company, which disclosed the layoffs in an 8-K filing Friday with the SEC, said it was cutting jobs because of “the ongoing adverse effects of the COVID-19 pandemic” on its operations. As of the end of 2020, Redbox reported having 1,467 employees.
In addition, Redbox on Friday notified the SEC that it is unable to file its 10-K annual report for 2021 within the prescribed time period without unreasonable effort or expense.
The company estimated that the layoffs will reduce its annual operating costs by $13.1 million, and that it will incur one-time restructuring charges of approximately $3.8 million, mostly related to severance payments.
In a filing in February, Redbox said that during the fourth quarter of 2021, it had 24 theatrical releases, which was lower than expected, and that the surge in COVID cases from the omicron variant caused “disruption” to the business. “As such, Redbox rentals have not recovered to the extent expected and, notwithstanding the year-over-year increase in new releases, were lower than the fourth quarter of 2020,” the company said.
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For the nine months ended Sept. 30, 2021, Redbox posted a net loss of $92.9 million — more than double the net loss of $39.1 million for the same period the previous year. The company had revenue of $216.4 million for the first nine months of 2021, down 53% from the year-earlier period. Redbox had $361.9 million in net long-term debt on its balance sheet as of Sept. 30.
On Jan. 28, 2022, Redbox borrowed the remaining $15 million available under its revolving credit facility. “Management is actively taking steps to decrease monthly costs, delay capital expenditures, and increase revenues,” the company said in the February filing, adding that “Redbox is also evaluating a variety of strategic alternatives.”
In October 2021, Redbox Entertainment became a publicly traded company after merging with a special purpose acquisition company (SPAC). Redbox operates a network of 40,000 kiosks across the U.S., while it also has tried to step up its move into streaming and original content acquisitions.
