Bob Bakish, CEO of ViacomCBS (now Paramount Global):
“Paramount has a long and storied history, and we’re proud to build on that legacy as we look to the future. Our goal is to bring the best stories to audiences everywhere, leveraging our iconic brands and innovative approaches to content.”
Paramount Global will cut about 15% of its U.S.-based workforce, co-CEO Chris McCarthy said on Thursday. The media company disclosed its plans for the layoffs as it released its second-quarter financial results.
McCarthy said the layoffs will be “primarily focused on two areas: first, redundant functions within marketing and communications; second, streamlining our corporate structure, reducing our headcount in finance, legal, technology and other support functions.” Some 2,000 staffers will lose their jobs in the layoffs, according to Reuters.
These layoffs will occur “in the coming weeks” and are expected to largely finish “by the end of the year,” McCarthy said. “We have incredibly talented people at Paramount, and these actions are not a reflection of their contributions,” he emphasized. “Rather, they are necessary to transform our organization for the future.”
Paramount Global’s Stock Surges as Streaming Division Hits Profit Amid Significant Layoffs and Challengeshttps://t.co/eVbXZDyFud$PARA $PARAA $DIS $NFLX $QQQ
— Stoxpo (@stoxpo) August 9, 2024
Paramount Global linked the upcoming headcount reduction to a “strategic plan” that involves streamlining its organization. “We announced in June that we’ve identified $500 million in annual run rate cost savings across the company. This $500 million is included in the $2 billion of cost efficiencies identified by Skydance,” McCarthy said.
In addition to streamlining its organization, Paramount Global has identified transforming its direct-to-consumer streaming business and optimizing its asset mix as key parts of its strategic plan. During the earnings call, the company noted it will see a roughly $300-$400 million restructuring charge in the third quarter in connection to the job cuts. The “cash impact” of the cuts “will occur over the next several quarters,” according to CFO Naveen Chopra.
Paramount Global generated $6.81 billion in total revenue during the second quarter, down 11% year over year. Its quarterly operating loss was nearly $5.32 billion, with the company noting it had a $5.98 billion goodwill impairment charge for its cable networks unit in the quarter.
Paramount Global Layoffs: Entertainment Company Behind Paramount Pictures To Lay Off 15% of Its US Employees Amid Cost-Cutting Planhttps://t.co/vu4FBTFvLI#ParamountGlobal #Layoffs #Layoffs2024 #JobCuts
— LatestLY (@latestly) August 9, 2024
The company’s three co-CEOs stated that they will “continue to aggressively execute” the strategic plan moving forward. “We are confident that our Plan will drive long-term value by leveraging our broad hit content as we continue to transform Paramount for the future,” they said.
Quotes
- Steven Spielberg, on working with Paramount:
“Paramount has always been a studio that’s taken risks and supported creative vision. I’ve been fortunate to work with them on many projects, and their commitment to filmmaking is unwavering.” - Martin Scorsese, on film preservation and Paramount’s role:
“Paramount’s legacy is not just about the films they produce today, but about their dedication to preserving the history of cinema. They’ve been instrumental in keeping the art form alive for future generations.”
Key Points:
i. Layoffs Announced: Paramount Global will cut approximately 15% of its U.S.-based workforce, resulting in about 2,000 job losses, primarily in marketing, communications, finance, legal, technology, and other support functions.
ii. Strategic Restructuring: The layoffs are part of a broader strategic plan to streamline the company’s organization, with a focus on reducing redundant functions and optimizing its corporate structure.
iii. Financial Impact: Paramount Global expects a $300-$400 million restructuring charge in the third quarter related to the job cuts, with the financial effects continuing over the next several quarters.
iv. Cost-Saving Measures: The company aims to achieve $500 million in annual run rate cost savings, contributing to the $2 billion in cost efficiencies identified by its partnership with Skydance.
v. Earnings Report: In its second-quarter financial results, Paramount Global reported an 11% year-over-year decline in total revenue to $6.81 billion and an operating loss of nearly $5.32 billion, partly due to a $5.98 billion goodwill impairment charge for its cable networks unit.
Susan Guglielmo – Reprinted with permission of Whatfinger News
