Paramount to Cut 15 Percent of US Workforce
Paramount facilities, U.S., 2024. Photo: X/ @SeekingAlpha
August 9, 2024 Hour: 8:27 am
The job cuts are part of a cost-saving plan aimed at reducing annual costs by US$500 million ahead of the Skydance merger.
On Thursday, media conglomerate Paramount Global announced that it will cut 15 percent of its U.S.-based workforce, or about 2,000 jobs, as part of a broader cost-cutting plan.
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The cuts will focus on two areas, including redundant functions in marketing and communications and in finance, legal, technology and other support roles, said Chris McCarthy, co-chief executive officer of Paramount Global, during a second-quarter earnings conference call.
“These actions will take place in the coming weeks and will largely be completed by the end of the year. These are difficult decisions to make,” he said.
The second-quarter earnings report released on Thursday revealed significant financial challenges for Paramount, which owns CBS, Paramount Pictures and popular cable networks.
The company reported a massive operating loss due to a 5.98-billion-U.S.-dollar write-down on the value of its cable TV networks. This devaluation is linked to Paramount’s pending acquisition by Skydance Media, which is expected to close by Sept. 30, 2025.
The job cuts are part of a previously cost-saving plan announced by Paramount’s three co-chief executive officers to reduce annual costs by US$500 million ahead of the Skydance merger.
This restructuring came as Paramount faced declining revenues in its traditional media operations. Overall revenue for the second quarter fell 11 percent to US$6.8 billion, with the company’s TV operations — its largest business segment — experiencing a 17 percent revenue drop.
The decline in TV revenue was attributed to an 11 percent decrease in advertising revenue and a 5 percent reduction in affiliate and subscription fees. These figures reflected the challenges traditional media companies face in an increasingly digital landscape.
However, amid the financial turbulence, Paramount’s streaming business emerged as a bright spot after turning a profit for the first time, with second-quarter revenue increasing by 13 percent and subscription revenue growing 12 percent year-over-year.
teleSUR/ JF Source: Xinhua