Sirius XM Radio ( SIRI) said Thursday it will have trimmed 22% of its work force by year-end, as the satellite radio provider moves to slash costs in order to stay on track and post an adjusted profit next year, even amid slumping car sales.The New York-based company will have cut 458 people from its staff, going down to 1,600 people from the 2,058 it employed before its July acquisition of XM Satellite Radio Holdings Inc. Sirius Chief Executive Mel Karmazin made the announcement at its annual shareholders meeting, according to a filing with the Securities and Exchange Commission. Karmazin noted that November car sales fell 37%, the weakest results in nearly three decades. Sirius sells its service through cars pre-installed with its radios and individual subscriptions. Sirius expects the job cuts and other cost-reduction measures to save $425 million next year. The company also forecast a smaller-than-expected adjusted loss before interest, taxes, depreciation and amortization of $200 million this year, down from $300 million as previously expected. For the fourth quarter, Sirius expects to post an adjusted profit of $32 million, a vast improvement over the $224 million loss it recorded in the year-ago period. For 2009, Sirius reaffirmed its expectation for adjusted profit of $300 million. But its number of subscribers is forecast to rise to just 20.6 million -- below the 21.5 million that Sirius forecast in September, before the Detroit automakers asked Congress for emergency loans. Analysts polled by Thomson Reuters are forecasting a 2009 loss of 15 cents per share.
Sirius also reaffirmed revenue forecasts of $2.4 billion this year and $2.7 billion in 2009. Analysts' expectations are more cautious for this year, forecasting $2.2 billion in revenue, but are in line with management's prospects for 2009. The company said $995 million of debt is due next year. It is holding talks with debt holders as well as new investors in an effort to ease its repayment schedule. In October, Sirius exchanged $30.5 million of debt held by institutions for 67 million common shares -- equaling 45 cents for each share received by debt holders. On Thursday afternoon, Sirius shares traded up a penny at 14 cents, well off the $3.89 they traded at a year ago. Amid the downturn in global markets, Sirius shares have lost nearly all of their value. But the company wants to execute a reverse stock split to boost its stock price, a proposal put to shareholders at the annual meeting on Thursday. Sirius said its shares must trade at $1 or higher to continue listing on the Nasdaq.