Charter Communications (CHTR), one of the largest cable and broadband providers in the U.S., is laying off about 1,200 employees, just over 1% of its 95,000-person workforce. Most of the job cuts will come from corporate and back-office roles, while customer service and sales staff are expected to stay in place.
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The company said the move is part of its plan to simplify operations and cut costs as growth in the cable industry slows. In fact, other major players like Comcast (CMCSA) and Paramount (PARA) have also announced layoffs recently, as more viewers move away from traditional TV.
Subscriber Numbers Continue to Decline
Like other cable providers, Charter is losing customers as more people switch to streaming. In the last reported second quarter, broadband subscribers fell by 117,000 to 29.9 million. Meanwhile, video subscribers also dropped 5% to 12.6 million, down from 13.3 million a year ago.
Although the drop in customers has slowed, Charter still faces a tough market. More homes are giving up cable TV for cheaper streaming services, hurting its main source of income. At the same time, new internet providers are offering faster speeds and lower prices, making it harder for Charter to keep and win back customers.
Charter Looks to Expand Reach with Cox Deal
To tackle growing competition, Charter is preparing to buy Cox Cable for $21.9 billion. The deal will combine Charter’s 31.4 million customers with Cox’s 6.3 million, giving the company a stronger base to compete.
By joining forces, Charter aims to cut costs, strengthen its position with content providers, and expand its broadband and wireless services. However, the merger will also bring integration risks and upfront expenses.
Is Charter Communications Stock a Good Buy Right Now?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on Charter Communications stock based on seven Buys, five Holds, and two Sells assigned in the past three months, as indicated by the graphic below. After a 23.4% loss in its share price over the past year, the average CHTR price target of $367.38 per share implies 45.49% upside potential.
