Paramount started handing out pink slips Tuesday as the media giant’s first round of layoffs began under co-CEOs Brian Robbins, Chris McCarthy and George Cheeks’ long-term strategic plan first unveiled in June.
The layoffs, which will be carried out in three phases and reduce the company’s total U.S. workforce by 15% are expected to be about 90% complete by the end of September, according to an internal memo from the executives obtained by TheWrap. The cuts will reportedly account for between 2,000-3,000 job cuts.
Among the cuts, Paramount announced the shuttering of Paramount Television Studios Tuesday, impacting about 20-30 jobs. Production and development of current and upcoming PTVS shows will transition to CBS Studios.
The move, which is part of $500 million in previously announced cost cuts, will focus on “redundant functions and streamlining corporate teams.” Previously announced areas that will be impacted include marketing and communications, finance, legal, technology and other support functions.
“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,” the trio wrote. “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,” they continued. “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.”
The $500 million in cuts are part of $2 billion in planned cost cuts associated with Skydance Media’s pending merger with Paramount Global. The $8 billion deal is slated to close in the third quarter of 2025, subject to regulatory approval and other customary closing conditions.
In connection with the $500 million, Paramount expects to incur a restructuring charge of $300 million to $400 million in the third quarter, with a cash impact that will occur over the next several quarters.
In addition to the cuts, Paramount has hired bankers to help the company with possible asset sales. TheWrap exclusively reported that Paramount sold the ComicBook and PopCulture websites to Nashville-based Savage Ventures for an undisclosed amount. Four individuals familiar with the co-CEOs’ plans previously told TheWrap that other possible assets that could be put up for sale include Pluto TV, BET, VH1 and the Paramount lot, which would be leased back for the studio’s use.
“The set of assets that make up Paramount Global today were built up through the rise of linear and while we have strong brands and businesses, we must reshape our portfolio to best compete in the future,” McCarthy said during Paramount’s second quarter earnings call last week. “The assets under consideration are undeniably strong with exciting futures ahead, but will be better served on their own or as a centerpiece of another business.”
The company is also in “active discussions” about potential strategic partnerships or joint ventures.
“That includes a series of partnerships that could potentially involve some licensing, but we’ll also be licensing content in addition to that,” McCarthy added during the earnings call.
Robbins, McCarthy and Cheeks’ plan comes in an effort to accelerate streaming profitability, which Paramount is currently on track to reach domestically in 2025.
During its second quarter, Paramount’s direct-to consumer-division swung to its first-ever streaming profit of $26 million, compared to a loss of $424 million in the year ago period. However, executives warned the DTC segment is expected to generate losses in the third and fourth quarters of the year, due to the timing of content expenses.
Paramount shed 2.8 million subscribers during the quarter for a total of 68.4 million, which primarily reflected the planned exit from a hard bundle agreement in South Korea and elevated churn from a cohort of subscribers that joined for the Super Bowl in the first quarter.
“We expect Paramount+ to return to net subscriber growth in the second half of the year as we benefit from a more consistent cadence of original content,” Chief financial officer Naveen Chopra said last week. “Now that we’re beyond the impacts of the strike, we also expect normalized international subscribers for the remainder of the year.”
Read the full text of Tuesday’s memo below:
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
