Ryan Kavanaugh’s company might not have made the court filings yet, but it has made the first new staff cuts at the struggling company.
“As Relativity continues to move forward with steps to strengthen its balance sheet and reduce costs, we’ve made the difficult decision to eliminate 75 full-time positions across several divisions,” a spokesperson said today. “This is a necessary step to position the company for a strong future. We appreciate the dedication and hard work of all of our colleagues, and we are making every effort to assist and transition those who are leaving the Company.” It is unclear who among those being let go today who will receive severance packages, sources tell me. Relativity had 350 full-time employees.
The cuts come as lawsuits have starting flying and loan payments have been missed. Kavanaugh is reportedly still scrambling to seal a deal with new investors to avoid bankruptcy as the only option of keeping his company alive in some form.
Relativity’s widespread financial woes have been the talk of the town for weeks, with expectations that a Chapter 11 filing would come as early as today or on Thursday. Of course in any situation like this it is people’s jobs and livelihoods that often take the first hits. No official word on where the cuts are coming from, but Relativity’s digital unit and feature productions are the most likely to be impacted, a source tells me. The company’s TV and Sports units, the latter of which Relativity Media is a minority shareholder, are expected to be spared — at least for the time being.