Paramount Global announced significant cutbacks on Thursday, revealing plans to lay off 15% of its US workforce, approximately 2,000 employees, and write down $6 billion in the value of its cable television networks. This restructuring comes as the company prepares for a merger with Skydance Media.
The layoffs are aimed at reducing annual costs by $500 million, focusing on streamlining “redundant functions” in marketing, communications, finance, legal, technology, and other support areas, according to Paramount co-chief executive Chris McCarthy.
The write-down reflects recent challenges in the linear television market and adjustments in the company’s market value in light of the Skydance transaction. This move underscores the broader struggles facing traditional television as viewers increasingly abandon cable for streaming services.
Paramount’s announcement follows Warner Bros. Discovery’s recent $9.1 billion write-down on its television assets. Warner Bros. Discovery CEO David Zaslav acknowledged the shift in market conditions, noting that valuations for legacy media companies have significantly changed.
The upheaval in the media sector extends beyond traditional TV. Axios recently announced its first-ever layoffs, cutting 10% of its staff due to the evolving media landscape. Additionally, the TV trade magazine Broadcasting+Cable, founded in 1931, is shutting down amid industry transformations.
Paramount has been particularly affected by these changes. The company, which owns major cable networks like Nickelodeon, Comedy Central, and MTV, has seen its stock price plummet nearly 80% over the past five years. Despite these challenges, Paramount+ reported a $26 million profit, a turnaround from a $424 million loss the previous year, and anticipates subscriber growth in the latter half of 2024.
Similarly, Warner Bros. Discovery saw a boost with its streaming platforms HBO, Max, and Discovery+, adding 3.6 million subscribers in the latest quarter, bringing its global total to 103.3 million.
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