Redbox, which went public via a SPAC last year, said it will lay off 150 employees, about 10% of its workforce. In an SEC filing, the company said “a number of potential strategic alternatives with respect to the company’s corporate or capital structure.”
The “ongoing 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 inside thousands of retail locations like grocery and convenience stores, the 20-year-old Redbox has expanded significantly. Drawing on 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 has looked to pump out dozens of films, primarily genre titles. Last October, it set a distribution deal with Lionsgate.
The layoffs took effect on March 29, according to multiple new SEC documents. The action will lower annual operating costs by about $13.1 million, but will also incur a one-time restructuring charge of $3.8 million, mostly to cover severance.
The pandemic has hammered Redbox in 2021, the filings note, and the company also saw an upswing in marketing and context costs related to its entertainment arm.
The company warned SEC regulators that its annual report would be filed late due to ongoing efforts to restructure and slash costs. On January 28, the company tapped the last available funds available through its revolving credit facility. “Increased costs during the fourth quarter of 2021 were not offset by an increase in revenues,” the filing starkly disclosed.
Redbox said it has been “actively taking steps to decrease monthly costs, delay capital expenditures and increase revenues.” It also has also been “exploring a number of potential strategic alternatives with respect to the company’s corporate or capital structure and seeking financing to fund operations and one-time restructuring costs.”