Paramount Fires 15 Percent of U.S. Workers
Paramount, the parent company of CBS, Nickelodeon and MTV, told its employees on Tuesday it was beginning a series of long-scheduled job cuts that would winnow its staff by roughly 15 percent in the United States.
The company’s three co-chief executives said in an internal note that the cuts — which would be “incredibly hard” — were necessitated by shifts in the entertainment industry.
“The industry continues to evolve, and Paramount is at an inflection point where changes must be made to strengthen our business,” said the note from Brian Robbins, the head of Paramount Pictures; George Cheeks, the head of CBS; and Chris McCarthy, the head of Showtime and MTV Entertainment Studios.
The layoffs, which will affect thousands of employees, are the latest in a series of cutbacks by major media players. Warner Bros. Disney laid off more than 100 employees in its TV division last month. The sweeping cuts will affect many departments within Paramount as it aims to reduce its annual cost by approximately $500 million. The chief executives stated in their note that they will be completed largely by the end September. The Ellison family is spending lavishly to finance a deal that includes $8 billion in capital.
While Paramount readies for its merger with Skydance, it is also exploring other options. The company has 45 days to “go shop”, allowing it time to see if there are other bidders who can top Skydance. Edgar Bronfman Jr. is one of the interested parties. He has been pursuing an offer for Paramount recently. Paramount+, its flagship streaming service, lost over 2.8 million subscribers in the last quarter. The company attributed this to the termination of a bundle deal in South Korea. The shrinking of the cable bundle, once the main growth engine for TV companies, has prompted executives to cut costs and team up with rivals to beef up their content libraries.
Those moves have done little for investors. Investors are skeptical that streaming will replace cable profits. This has led to a decline in the share prices of many traditional media companies.
