Paramount Cuts 15% of US Staff, Writes Down $6B Amid TV Issues

Paramount global revealed it will cut 15% of its US workforce and write down $6 billion in its cable TV assets as it gets ready to join with Skydance Media. 

The layoffs, impacting around 2,000 employees over the next few weeks, are aimed at cutting $ 500 million in annual costs company-wide in preparation for Paramount's merger with David Ellison’s SkyDance. According to Paramount co-CEO Chris McCarthy, the depletion will eliminate “redundant Functions” in Marketing and communications and decrease staff in Finance,legal, technology, and other support areas.

Paramount, which oversees a large cable and television portfolio, announced a writedown of its TV business “is primarily as a result of recent indicators in the linear affiliate marketplace, and the estimated total company market value indicated by the Skydance transactions.”

The announcement spotlighted the severe effect of the rapid shift from cable bundles to streaming services, underscoring the dramatic changes facing the traditional television industry.

On Wednesday, Warner Bros. Discovery, the parent company of CNN, TNT, HGTV, and other cable networks, announced a $9.1 billion writedown on its television business. 

“It’s fair to say that even two years ago, market valuations and prevailing conditions for legacy media companies were quite different than they are today,” WBD chief executive David Zaslav said on a call with investors. “And this impairment acknowledges this.” 

The recent disruption in the media sector goes beyond traditional television, affecting platforms and print publications as well.

Recently, Axios revealed it would lay off 10% of its staff, around 50 employees, marking the first layoffs in the Outlet’s history due to what it called “changes in the media business”.

“This is a painful but necessary move to tighten our strategic focus and shift investment to our core growth areas. We’re making some difficult changes to adapt fast to a rapidly changing media landscape,” 

This week, long-established TV trade magazine Broadcasting+Cable, founded in 1931, announced its closure due to what its parent company described as a “rapid transformation” in the industry.

As television profits have declined, Paramount has been particularly affected. The iconic company, which owns cable networks like Nickelodeon, Comedy Central, and MTV, has seen its valuation release suddenly, with Paramount shares falling nearly 80% over the past five years. 

Despite these challenges, there have been some recent positives.

Paramount reported a $26 million profit from its streaming service, Paramount+, which had a $424 million loss during the same period last year, and it anticipates subscriber growth in the later half of the year.

Warner Bros. Discovery announced that its HBO, Max, and Discovery+ streaming services gained 3.6 million new subscribers in the previous quarter, bringing its total to 103.3 million global subscribers as it continues to expand internationally.