Paramount Global has officially initiated long-planned layoffs as it looks to reduce its U.S.-based workforce by 15%.
The first of three stages of staff reductions is beginning today, with 90% of the total cuts to be completed by the end of September. George Cheeks, Chris McCarthy and Brian Robbins, the three members of the Office of the CEO, laid out details this morning in a memo to employees (read it below).
“The industry continues to evolve, and Paramount is at an inflection point where changes must be made to strengthen our business,” the Co-CEOs wrote.
“We know that having to part ways with teammates whose contributions have been instrumental to our success is incredibly hard,” they added. “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.”
Paramount reported having 21,900 full- and part-time employees in 33 countries globally at the end of 2023, as well as 4,500 project-based staffers. Last February, the company let go of 3% of employees. The current rounds are expected to see up to 3,000 more employees depart.
The cuts are part of a corporate effort to generate annual run-rate cost savings of $500 million. Paramount implemented the February layoffs as it began to confront a number of financial challenges, mainly the impact of its declining cable TV business. Last week, in reporting second-quarter earnings, the company took a $6 billion write-down on its cable networks, joining industry peer Warner Bros. Discovery in acknowledging the value destruction of that asset class.
The biggest concession to industry pressures has been to put the company up for sale. Skydance Media is poised to take control of Paramount in a merger to be completed by the first part of 2025. David Ellison’s company made multiple overtures during a seven-month period of negotiations, finally prevailing with a plan to invest $8 billion in a two-step takeover. It will first acquire controlling shareholder National Amusements Inc. before executing a merger with Paramount, with RedBird Capital and Oracle billionaire Larry Ellison among the financial backers.
During a call with Wall Street analysts to discuss the quarterly results, McCarthy said marketing and communications would be one of two areas to be targeted in the reductions. The other will be support functions including legal, finance and other areas of the company’s administrative operations.
Chatter had been mounting internally before official word came confirming the August 13 start of the cutbacks. This is a momentous month for Paramount, with layoffs beginning after earnings and ahead of the August 21 expiration of the “go-shop” period in the Skydance proposal. Other bidders have had 45 days to come forward. If no other compelling offer emerges and wins support from Paramount’s board, the Skydance transaction will proceed to a regulatory review.
Here is the full memo:
Hi Everyone,
In June, we laid out our Strategic Plan to return Paramount to profitable growth, which includes streamlining the organization and cutting costs by $500 million on an annualized basis. As we continue to advance our plan, we announced on our earnings call last week that we will be reducing our US-based workforce by approximately 15%, focusing on redundant functions and streamlining corporate teams.
This process will take place in three phases, starting today and continuing through the end of the year. We expect 90% of these actions to be complete by the end of September.
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. During this time, we ask that everyone please be mindful of how this news may affect your colleagues and offer support to those who need it.
The industry continues to evolve, and Paramount is at an inflection point where changes must be made to strengthen our business. And while these actions are often difficult, we are confident in our direction forward. We understand that you may have questions about next steps, and while we may not be able to provide all the answers at this time, we will continue to update you on our progress.
We remain ever grateful for your hard work in delivering results for our audiences and communities.
Best,
George, Chris & Brian
