After a lean second quarter earning report, Paramount is moving forward with job cuts to try and restabilize the company. The Paramount layoffs will affect 15% of the workforce which is estimated to impact at least 2,000 people. Along with a reduction of the US workforce, Paramount is planning to shit down the Paramount Television Studio. The company aims to reduce its annual costs by $500 million USD before its upcoming merger with Skydance Media. The company generated $6.81 billion in total revenue in the second quarter, which was down 11 percent year over year.
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Paramount Job Cuts Announced—15 Percent of the Workforce to Be Affected by Layoffs
News of Paramount’s U.S. workforce reduction plans first came to light when media pages got a hold of the memo that was shared with employees. Paramount’s layoffs will begin in August 2024 and the company intends to wrap up at least 90% of the workforce reduction process by the end of September. According to the memo sent out by the three members of the Office of the CEO, George Cheeks, Chris McCarthy, and Brian Robbins, the job cuts will be conducted in three stages. Estimates suggest that around 2,000 employees will be laid off but the final numbers could be higher.
The company reportedly had 21,900 employees across 33 countries around the end of 2023. The Paramount layoffs will affect 15% of the U.S. workforce and will focus on “redundant functions and streamlining corporate teams.”
“We know that having to part ways with teammates whose contributions have been instrumental to our success is incredibly hard. In partnership with our HR leaders, we are committed to providing support to employees transitioning on from Paramount and to our teams who will need to adapt to these changes.”
According to Deadline, during the call with Wall Street analysts, it was revealed that the Paramount job cuts will largely focus on employees from the marketing and communication teams. Additionally, the legal and finance team as well as company administrative operations could also be affected.
Troubling Times for Media Houses
Paramount’s current U.S. workforce reduction plans are not the first time the company has had to lay off its workers. The company was forced to lay off 3% percent of its workplace which was over 800 workers back in February. The earlier round of layoffs reportedly took place across various divisions such as Paramount+, CBS, Comedy Central, MTV, Nickelodeon, Paramount Pictures, and Showtime.
The company has faced many challenges over the last few years and its struggle to keep up with the streaming giants in the entertainment industry has had a big role to play in the matter. The hunt for a solution led them to the possibility of a merger, but things had come to a standstill during negotiations with the top buys, Skydance Media. Now things have been settled between the two companies and it appears that $8 billion will be invested into the takeover. Other bidders have not come forward to present Paramount with a better offer so it appears that the merger will be moving forward. Paramount Global has begun working on its direct-to-consumer streaming business as part of its strategic plan to help the business. Warner Bros. Discovery has been faced with similar issues of losing money in the entertainment industry.
As Paramount lays off 15% of its workforce as an immediate measure, once the merger is completed, it could mean another round of job cuts to accommodate the vast workforce. “Paramount is at an inflection point where changes must be made to strengthen our business,” the company has stated, but their strategy on how they intend to solidify the business further still remains unclear. Paramount has not revealed the details of how the employees will be supported during their transition out of the company.
Major restructuring efforts are occurring across the globe and employees are the first to be affected in the attempt to cut costs. Some employees have the benefit of a severance package to help with the transition to new opportunities but not everyone is able to find the support they need to make the move smoothly. The tightening job market makes it even harder to find work but retention does not appear to be a priority across industries right now.
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