Dish Network LLC, the satellite television and wireless service provider, continues to face mounting challenges as it attempts to complete its 5G cellular network and rework a massive amount of debt.
On Tuesday, the Douglas County-based company, a subsidiary of EchoStar Corp., informed the state that it will cut another 53 jobs, bringing the tally of workers let go since November to 718.
It has also failed twice this year to refinance nearly $5 billion in upcoming debt obligations with creditors, some of whom are threatening to sue over what they allege are violations of their original loan agreements.
On Wednesday, the company confirmed that Mike Kelly, the executive overseeing retail wireless strategy, has resigned and will depart at the end of the month.
“We appreciate his hard work and commitment to our business. While we conduct a search for his successor, Hamid Akhavan, president and CEO of EchoStar, will lead strategy and key day-to-day operations for the retail wireless brands,” company spokesman Ted Wietecha said in an email.
Employees at 9601 S. Meridian Blvd. and 5701 S. Santa Fe Drive were told Tuesday that they would lose their jobs effective April 20, according to a Worker Adjustment and Retraining Notification letter the company filed with the Colorado Department of Labor and Employment.
The bulk of layoffs, about 49, involve members of the sales associates or sales account executives, according to the letter filed by Dish General Counsel Kaylee Hyman.
“After a thorough review of our operations and consideration of a changing business environment, we made the difficult decision to remove 53 positions in our company,” Wietecha said. “Today’s decision reflects our focus on improving company performance in an evolving marketplace, and we will continue to make strategic hires and investments to support our growth.”
Last month the company announced it would let go of 157 workers and then another nine workers in two separate reductions. And in November, the company told the state it would cut 499 workers after a disappointing earnings report.
After years of acquiring wireless spectrum, Dish launched the nation’s fourth wireless network in 2020 with its acquisition of Boost Mobile, which it acquired as a condition of the approval of the merger of T-Mobile and Sprint.
Dish built and launched a cutting-edge 5G cellular network at a record clip, meeting federal deadlines, but amassing $21 billion in debt doing so.
But with customers continuing to leave its legacy pay-television business, and new customers signing up more slowly than expected for its wireless business, Dish has struggled to find the money needed to complete its network buildout while also servicing its debt.
The company has until June 2025 set by the Federal Communications Commission to cover 75% of the U.S. population. Although it reached 70% of the population last summer, getting that extra 5% will require a significant investment in the months ahead.
At the end of last year, Dish Network and EchoStar, both founded by Charlie Ergen, merged so Dish could access EchoStar’s stronger balance sheet and find more favorable terms from creditors.
EchoStar, however, has had to cancel two debt exchange offerings on close to $5 billion in Dish convertible notes after investors pushed back on the terms being offered. An exchange would have bought the company more time, until 2030, to deal with a heavy wall of debt that is coming due in 2025 and 2026, but the company so far has failed to find common ground with its creditors.
A group of creditors holding a large portion of the debt have even threatened legal action for “debt swap fraud,” after the company moved some of its unencumbered wireless spectrum licenses into a newly formed subsidiary called EchoStar Wireless Holding LLC.
The transfer reduces the amount of collateral creditors could access in the event of a default. EchoStar also said it would shift 3 million of its pay-TV subscribers into a new subsidiary, meaning the cash they generated would not be available to current creditors. The price of Dish bonds, already distressed, fell even further.
Craig Moffett, an analyst with MoffettNathanson, said in a research note earlier this month that the way EchoStar has behaved towards its bondholders since combining with Dish Network shows it is “willing to ride roughshod over the interests of its creditors” or that it may be facing imminent bankruptcy.
Wietecha said he has no additional information to share at this time regarding potential legal action by creditors against the company.
