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Paramount Global has initiated the next phase of its plan to lay off 15% of its U.S. workforce, saying the cuts will be 90% complete after further cutbacks today.
George Cheeks, Chris McCarthy and Brian Robbins conveyed the news to staffers in a memo this morning. (Read it in full below.) The Co-CEOs months ago said they were aiming to achieve $500 million in annual cost savings, with layoffs a key component in hitting that target.
Sources have indicated to Deadline in recent days that the streaming organization within Paramount, encompassing several departments, will be the most directly affected by Phase 2.
“Like the entire Media industry, we are working to accelerate streaming profitability while at the same time adjusting to the evolving landscape in our traditional businesses. In order to set Paramount up 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 departing, we are incredibly grateful for your countless contributions.”
The staff reductions stem from a daunting set of financial challenges facing Paramount and other legacy media companies, especially due to the decline in linear TV viewership and advertising. Last month, as Paramount reported its second-quarter financial results, it also revealed a $6 billion write-down of the value of its cable network assets. As the cash flow from traditional pay-TV sources diminishes, the cost profile of the streaming business and the ever-increasing fees for top-tier sports rights are only adding to the worries of companies saddled with significant debt.
As it has tightened the belt over the past year, Paramount has also pursued a sale of certain assets as well as the company as a whole. Skydance Media last month clinched a merger deal that will see it invest $8 billion in the takeover of controlling shareholder National Amusements before merging fully with Paramount.
Here is the full memo from the Co-CEOs:
Hi Everyone,
We are following up on the note below to inform you that today, we will begin phase two of our workforce reductions in the US.
Like the entire Media industry, we are working to accelerate streaming profitability while at the same time adjusting to the evolving landscape in our traditional businesses. In order to set Paramount up 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 departing, we are incredibly grateful for your countless contributions.
We appreciate everyone’s resilience and commitment to delivering some of the biggest hits across TV and Film, and for continuing the hard but necessary work to best position the company for the future.
Thank you,
George, Chris & Brian
