In a bold move to streamline operations and boost profitability, Paramount Global is laying off 15% of its U.S. workforce by the end of the year.
Paramount Global, a major player in the entertainment industry with storied properties such as CBS, MTV, Nickelodeon, and BET, has announced plans to lay off approximately 2,000 employees. The layoffs will take place in three phases, with 90% expected to be completed by the end of September. This strategic decision comes as the company aims to cut $500 million in annual costs in preparation for a significant merger with Skydance Media.
Paramount Global Is Laying Off Thousands of U.S. Employees https://t.co/BkQFWhpNUg #Business #Startup #Success pic.twitter.com/QkOpfHtGxI
— Doug Brown, DBA (@dougbrownDBA) August 9, 2024
Paramount’s decision is not isolated; it reflects broader trends in the media and entertainment industry where companies are feeling the pressure of evolving consumption patterns and economic pressures. In the last quarter, Paramount recorded a nearly $6 billion write-down on its cable networks, demonstrating the financial struggles older media giants are facing
As part of the restructuring, Paramount Television Studios (PTVS) will be shut down, and all ongoing and development projects will be transferred to CBS Studios. This consolidation is aimed at centralizing operations and cutting down on redundancy
Additionally, the company has sold two entertainment websites, ComicBook and PopCulture, to Savage Ventures. The terms of the deal were not disclosed, but it signifies the company’s drive to offload non-core assets in a bid to focus on profitability
Paramount Global has been struggling with declining profits from its cable TV operations, exacerbated by the rise of Big Tech streaming services like YouTube, which have eaten into the traditional cable TV revenue streams. This is not unique to Paramount; other industry giants, including Warner Bros. Discovery, have also announced hefty write-downs and strategic shifts.
Controlling shareholder Shari Redstone has decided to sell Paramount Global, a company her family has controlled for nearly 35 years. A group led by David Ellison has reached an $8-billion deal to buy Paramount, pending regulatory approval. The deal includes a $1.5 billion cash infusion to help pay down debt and more than $4 billion to buy shares from Paramount investors.
The entertainment and tech sectors have seen alarming layoffs recently. Over 130,000 tech workers have lost their jobs in 2024, following 191,000 layoffs in 2023. This trend is symptomatic of larger economic issues and challenges within these industries.
Despite these challenges, Paramount+ managed to post a $26 million profit for 2024 after suffering more than $400 million in losses in 2023. This isolated success offers a glimmer of hope amid widespread financial adversity .
In conclusion, Paramount Global’s layoffs are a direct response to the financial pressures and shifting market dynamics in the media and entertainment sectors. As the company gears up for its merger with Skydance Media, it remains to be seen how these changes will impact its future.
