Paramount Global has officially begun long-planned layoffs and intends to reduce its U.S. workforce by 15%.
The first of three phases of staff reductions begins 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 CEO’s office, laid out details in a memo to employees this morning (read it below).
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“The industry is constantly evolving and Paramount is at an inflection point where changes must be made to strengthen our business,” the co-CEOs wrote.
“We know it is incredibly difficult to part ways with teammates whose contributions have been instrumental to our success,” they added. “Working with our HR leaders, we are committed to supporting employees transitioning from Paramount and our teams as they adapt to these changes.”
Paramount said it will have 21,900 full-time and part-time employees in 33 countries worldwide, as well as 4,500 project-based employees, by the end of 2023. Last February, the company laid off 3% of its workforce. At least 2,000 more employees are expected to leave the company as part of the current round of layoffs.
The cuts are part of the group’s efforts to save $500 million in costs annually. Paramount made the layoffs in February as it faced a series of financial challenges, most notably the impact of its declining cable TV business. Last week, the company took a $6 billion writedown on its cable networks when it announced second-quarter results, joining industry rival Warner Bros Discovery in acknowledging the value destruction of the asset class.
The biggest concession to industry pressure was the sale of the company. Skydance Media is close to taking control of Paramount. The merger is expected to be completed in the first half of 2025. David Ellison’s company made several offers during seven months of negotiations and finally prevailed with a plan to invest $8 billion in a two-stage takeover. First, Skydance Media will acquire majority shareholder National Amusements Inc. before merging with Paramount. The backers include RedBird Capital and Oracle billionaire Larry Ellison.
On a conference call with Wall Street analysts to discuss quarterly results, McCarthy said marketing and communications would be one of the two areas targeted for cuts, with the other being support functions such as legal, finance and other areas of the company’s administrative operations.
Internal rumors had intensified before the official announcement came that the cuts would begin on August 13. This is a significant month for Paramount because the layoffs will begin after earnings are announced and before the “go-shop” deadline on the Skydance offer on August 21. Other bidders had 45 days to come forward. If no other compelling offer is made and has the support of the Paramount board, the Skydance transaction will be subject to regulatory review.
Here is the full memo:
Hello everyone,
In June, we unveiled our strategic plan to return Paramount to profitable growth, which includes streamlining the organization and reducing costs by $500 million on an annualized basis. As we continue to advance our plan, we announced at our earnings call last week that we will reduce our U.S. workforce by approximately 15%, focusing on redundant functions and streamlining corporate teams.
This process will be carried out in three phases, starting today and lasting until the end of the year. We expect 90% of these measures to be completed by the end of September.
We know it is incredibly difficult to say goodbye to teammates whose contributions have been instrumental to our success. Working with our HR leaders, we are committed to supporting employees transitioning from Paramount and our teams as they adapt to these changes. During this time, we ask that everyone be aware of how this news may impact their colleagues and offer support to those who need it.
The industry is evolving 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 about the future. We understand that you may have questions about what’s next, and while we may not be able to provide all the answers at this time, we will continue to keep you updated on our progress.
We are eternally grateful for your hard work and delivering results for our audiences and communities.
Preferably,
George, Chris and Brian
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