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Paramount initiates layoffs in an effort to cut 15% of its U.S. workforce

Paramount initiates layoffs in an effort to cut 15% of its U.S. workforce

Vaseline 2 months ago

Paramount Global has initiated the next phase of its plan to lay off 15% of its U.S. workforce and says the cuts will be 90% complete after further cuts today.

George Cheeks, Chris McCarthy and Brian Robbins delivered the news to staffers in a memo this morning. (Read it in full below.) The co-CEOs said months ago that they were aiming to achieve $500 million in annual cost savings, with layoffs playing a key role in achieving that goal.

Sources have indicated to Deadline in recent days that the streaming organization within Paramount, which includes several departments, is expected to be most directly affected by Phase 2. The company’s advertising division was the target of a number of cuts last week. During the year, a number of high-profile executives left the company and Paramount Television closed and the shows moved to CBS Studios.

“Like the entire media industry, we are working to accelerate streaming profitability while adapting to the changing landscape in our traditional businesses. “To position Paramount for continued success, we are taking these actions,” the memo said. “Days like today are never easy. It is difficult to say goodbye to valued colleagues, and to those who are leaving we are extremely grateful for your countless contributions.”

The IBEW, the largest union representing CBS employees, opposed the cuts to CBS Broadcasting employees in New York, Los Angeles and Washington, DC. “IBEW members have been producing CBS broadcasts since before the invention of television,” said Robert Prunn. , the union’s director of broadcasting and telecommunications, “and these layoffs are a hard pill to swallow.”

Paramount had 21,900 full- and part-time employees in 33 countries worldwide as of the end of 2023, as well as 4,500 project employees. Last February, the company laid off 3% of its workforce. In the current rounds, a total of at least 2,000 additional employees are expected to leave. No exact figures are available for today’s round, but several hundred workers are believed to have been affected.

The staff cuts come amid a huge set of financial challenges facing Paramount and other traditional media companies, mainly due to declines in linear TV viewership and advertising. When Paramount reported its second-quarter financial results last month, it also revealed a $6 billion writedown on the value of its cable network assets. As cash flow from traditional pay-TV sources declines, the streaming sector’s cost profile and ever-increasing premium sports rights fees only add to the concerns of companies saddled with significant debt.

As Paramount has tightened its belt over the past year, it has also pursued a sale of certain assets and the company as a whole. Skydance Media entered into a merger deal last month in which it will invest $8 billion to acquire controlling shareholder National Amusements before fully merging with Paramount.

Here’s the full memo from the co-CEOs:

Hello everyone,

We are following up on the note below to inform you that today we are beginning phase two of our US workforce reductions.

Like the entire media industry, we are working to accelerate streaming profitability while adapting to the changing landscape in our traditional businesses. To position Paramount for continued success, we are taking these actions, and after today, 90% of these reductions will be complete.

Days like today are never easy. It is difficult to say goodbye to valued colleagues, and to those who are leaving we are deeply grateful for your countless contributions.

We appreciate everyone’s resilience and dedication to delivering some of the biggest hits in TV and film, and for continuing the hard but necessary work to best position the company for the future.

Thank you,
George, Chris and Brian