Why ABS-CBN is still retrenching 200 employees with P6 billion on the way - Rappler

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ABS-CBN Corporation, which has not turned a profit since it lost its broadcast franchise, has P6 billion in new money coming in, the largest show of confidence in the company since the shutdown of 2020. Then on Tuesday, September 15, it announced that around 200 employees will be losing their jobs.

This will be the 6th straight year the workforce shrinks. ABS-CBN went into the shutdown with 11,071 workers, counting regular employees, project and program-based staff, independent contractors and talents together. By the end of 2025, it came down to 3,646, made up of 2,009 regular employees on permanent contracts, 206 project employees, 582 program-based employees and 849 independent contractors. Nearly 5,000 went in the first round alone, a figure that ABS-CBN president and CEO Carlo Katigbak gave shareholders at the 2020 annual meeting.

Those two things were put out side by side in ABS-CBN’s September 15 official statement. It called the new investments “a vote of confidence in the future of the company” in one paragraph, and in the next said it has been “a difficult year for the content industry,” blaming the Middle East conflict, high inflation and low economic growth for weaker advertising and consumer spending. Then it announced “the difficult decision to implement a retrenchment program to keep ABS-CBN on strong financial footing,” covering “around 200 people or 7% of the company’s workforce.” At a town hall meeting on Tuesday, according to sources familiar with the meeting, Katigbak told employees this would be the last retrenchment under his leadership.

So if investors are finally putting P6 billion into ABS-CBN, why are 200 employees going out?

The P6 billion is fresh capital going into a company in trouble. It will arrive in tranches through 2026, released as the existing owners and the new one, I&C Holdings Corp., settle terms between them. Salaries, on the other hand, fall due every month.

I&C is taking P3.5 billion of it. ABS-CBN describes the firm in its own August 12 statement as a fully Filipino-owned private investment holding company “that invests for long-term company turn-around.” Crème Investment Corporation, Mantes Corporation, and Presta Holdings Company Inc., representing three branches of the Lopez family, are taking P2.2 billion between them. Lopez Inc. is taking P300 million. “This substantial investment is a vote of confidence in ABS-CBN,” chairman Mark Lopez said when the agreements were signed.

What the money buys are newly issued common and preferred shares that do not exist yet. They have to come out of an increase in ABS-CBN’s authorized capital stock, which shareholders are due to vote on at a special meeting on September 30 and the Securities and Exchange Commission (SEC) has to approve afterward. ABS-CBN has told the exchange the public float will be diluted, meaning the shares held by ordinary investors will account for a smaller slice of the company. The same meeting is expected to expand the board from seven directors to nine.

ABS-CBN told the exchange the proceeds are for working capital, for strengthening the balance sheet and for general corporate purposes. In plain terms, most of it is for paying what the company already owes. Some of it will likely go to repaying the bank loans coming due.

The books show how much that is. At the end of June, ABS-CBN held P1.31 billion in cash against P8.64 billion in loans falling due within 12 months. Its short-term obligations exceeded the assets it could quickly turn into cash by P14.2 billion, a gap that had widened from P12.4 billion at the end of December. Shareholders’ equity, which is what would be left if the company sold everything and paid everyone, had gone below zero, to minus P1.08 billion from a positive P747 million six months earlier.

So the P6 billion dropped into that picture pushes equity back above zero and gives the company something to show its banks. It will not change what the business earns next year.

The media company itself was not only losing money. It was losing more than the year before, and by the middle of this year, its everyday operations had stopped producing any cash at all.

Revenues in the first half of 2026 fell 17% to P6.88 billion, and the net loss more than doubled to P1.83 billion. The clearest measure was EBITDA, which strips out interest and the paper cost of ageing equipment to show whether a business generates cash from running itself. In the first half of 2025, it was positive P568 million. In the first half of 2026, it was negative P498 million.

ABS-CBN has a fair answer to part of this. The first half of 2025 carried election advertising, BINI‘s sold-out Philippine Arena concert, and a strong Star Cinema release, none of which repeated. And the company says that setting political advertising aside, content revenues were flat. It expects the second half to improve on the back of BINI’s world tour and the rest of its film and live-events slate. But that does not explain the cost side, where salaries and wages rose to P2.5 billion from P2.4 billion. Personnel and talent costs rose to P1.82 billion from P1.65 billion, even as revenue fell.

The easy explanation would be Sky Cable, whose cable and broadband revenues fell 42% to ₱1.12 billion as subscribers kept leaving.

The numbers point elsewhere. Sky cut its operating costs 25% in the first half and halved the personnel costs to P257 million. And it ended the period still generating cash from operations with EBITDA of positive P11 million. The content business went the other way, to negative P509 million, with a net loss of P1.24 billion against P535 million a year earlier.

The heavier pressure sits in the part of ABS-CBN that is supposed to be its future.

The cutting started in 2020, years before any new investor appeared. Katigbak set out the scale himself at the August 2026 annual meeting. Leaving Sky aside, general and administrative expenses plus manpower costs fell from around P15 billion in 2019 to P6.9 billion in 2025, a reduction of 54%, while debt fell from P20.5 billion to just under P8.5 billion, a reduction of 58%.

The workforce came down with it. After the 2020 retrenchment the company and its subsidiaries counted 5,870 people at the end of 2021, then 5,701, then 5,279, then 4,022 after the restructuring that followed the collapse of the Sky Cable sale to PLDT, and 3,646 at the end of 2025. Regular employees, the ones on permanent contracts, fell from 3,899 to 2,009 over those 4 years. In its 2025 sustainability report, ABS-CBN puts its employees at 2,797 and its attrition rate, including retrenchment, at 32%.

“We recognize that we are not yet where we need to be,” Katigbak told shareholders in August.

Retrenchment is not a saving that starts immediately. Separation pay goes out first and the lower payroll shows up afterward, which is why a company short of cash can find it hard to afford.

ABS-CBN has been carrying that cost for years. It paid roughly P1.1 billion in separation benefits during the 2020 retrenchment. Its audited 2025 financials show that the parent company still owes P874 million to employees retrenched and separated in earlier rounds, down only P70 million from the P944 million owed a year before.

The ABS-CBN retirement fund that normally pays those benefits is nearly empty. At the end of June, it held P61 million against P3.53 billion owed to employees. Two years earlier, the fund held P228.5 million. For 2026, ABS-CBN expects to put P60.4 million back in.

A company holding P1.31 billion in cash against P8.64 billion in loans coming due cannot easily write separation checks for 200 employees, while a company with P6 billion committed incoming capital can. This means the new money is not what makes the retrenchment unnecessary but part of what makes it payable.

There is a 3rd audience for the announcement. Almost all of ABS-CBN’s debt now sits in the column for obligations due within a year, P8.4 billion of it at the parent company, because a standstill agreement with its lenders ran out at the end of 2025. The P5 billion owed to the Bank of the Philippine Islands (BPI) and the P4.75 billion owed to UnionBank have been extended in short increments since, most recently to May 31 and June 30 of this year.

The company is in talks to refinance those loans on longer terms, including removing the requirement that it hold a broadcast franchise. Its interim accounts still carry a formal warning that there is material uncertainty over whether ABS-CBN can continue operating as a going concern, and among the steps management lists in response is continuing cost control that reduces general and administrative expenses and employee costs.

The statement gave a number and stopped. The company has not said which divisions the 200 come from or how many will go from each, how much it expects to save every year, or how much the separation packages will cost. It has not given a current headcount, or a headcount that separates ABS-CBN from Sky. Nor has it said how the P6 billion will be split between the loans falling due, the money owed to employees from earlier rounds, and the day-to-day running of the business.

And one question the disclosures do not touch: Was this reduction already in the plans and projections shown to I&C Holdings and the Lopez investors before they signed? There is no evidence any of them demanded it, and ABS-CBN was cutting costs long before I&C appeared. But money that arrives in tranches, on conditions, from an investor that describes itself as backing long-term turnarounds, comes with a view about what a company should cost to run.

Katigbak’s promise to employees at the town hall meeting — that this would be the last retrenchment under his leadership — can mean two different things. It can mean ABS-CBN has finally reached a size it can sustain, or it can mean only that there will be no further retrenchment for as long as he is chief executive. Only the first is a statement about the business.

The test is the arithmetic. The company has to reach the point where what it earns covers what it spends, and the first half of 2026 moved away from that point rather than toward it.

The 200 will not be the first to leave with money still owed to them. People let go in the earlier rounds are still owed money years later.

Strengthening a balance sheet means paying down what a company owes, and the money owed to former employees sits on that balance sheet alongside bank loans. The P6 billion may well be what clears both.

“We owe it to our banks, our employees, our partners to make good on all our obligations to them,” Katigbak told shareholders in August. On September 30, the shareholders are due to vote on the capital increase the P6 billion depends on. ABS-CBN has not said which divisions the 200 come from, or how much of the new money goes to the people it has already let go. – Rappler.com

Lala Rimando wrote about Philippine business, and managed newsrooms, including Newsbreak, ABS-CBN, Rappler, and Forbes, for over 25 years. She’s now based in La Union, taking care of her mom with dementia, and working on the multimedia biography of the late John Gokongwei.