Paramount announce huge layoffs ahead of merger
Paramount Global, the conglomerate that owns Paramount Pictures, is set to cut around 2,000 jobs in a bid to reduce its costs shortly before a merger with the independent movie studio Skydance is completed.
The company also own CBS, Nickelodeon and Channel 5 in the UK, and are planning to cut around 15 per cent of its employees who work in the US. The news arrived as Paramount Global announced its latest earnings, with the decline in cable TV causing a significant financial haemorrhage.
The value of the cable networks owned by Paramount are down $6 billion, even though their streaming businesses have recorded their first quarterly profits. Nevertheless, audiences have been moving away from the likes of Nickelodeon, MTV and Comedy Central for many years, and the pivot toward streaming may take many more years.
Now, the merger with Skydance has made Paramount consider how much revenue is being brought in by each of their businesses, with an operating loss of $5.3 billion in the second quarter forcing their hand somewhat.
“The set of assets that make up Paramount Global today were built up through the rise of linear and while we have strong brands and businesses, we must reshape our portfolio to best compete in the future,” Paramount co-CEO Chris McCarthy recently said.
He added, “The assets under consideration are undeniably strong with exciting futures ahead, but will be better served on their own or as the centerpiece of another business.”
In addition, Paramount are hoping to arrange new “strategic partnerships” for its main streaming service Paramount+ and have contacted a number of parties in hopes of reaching a new form of sustained profitability.
“Our strong performance in Q2 demonstrates that we are delivering on our strategic priorities,” the company’s joint CEOs said. “We are proud of our results, including significant earnings growth largely driven by our DTC segment.”
They continued, “In fact, for the fourth year in a row, Paramount+ is leading the industry in domestic sign-ups driven by our big broad hit TV series and blockbuster films. We are confident that our Plan will drive long-term value by leveraging our broad hit content as we continue to transform Paramount for the future.”
Still, the immediate effect is that several employees at Paramount will lose their jobs, with a particular focus on cuts in the fields of marketing, communications, finance, legal, technology and support. The redundancies will start occurring over the next month and are planned to be completed by the end of the year.
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