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The company is cutting back in anticipation of its merger next year with Hollywood studio Skydance.
By Benjamin Mullin
Paramount, the parent company of CBS, Nickelodeon and MTV, announced to employees on Tuesday that it would begin a series of long-planned job cuts that would result in a relief in its workforce of about 15 percent in the United States.
The company’s three co-CEOs said in an internal memo that the budget cuts, which would be “incredibly severe,” were necessitated through adjustments to the entertainment industry.
“The industry continues to evolve and Paramount is at an inflection point where we want to make adjustments to our business,” says the note from Brian Robbins, director of Paramount Pictures; George Cheeks, director of CBS; and Chris McCarthy, head of Showtime and MTV Entertainment Studios.
The layoffs, which will affect thousands of workers, are the latest in a series of cuts imposed through the mainstream media. Warner Bros. Discovery, the parent company of CNN, TNT and HBO, has cut its workforce in recent years to pay billions in debt. Disney laid off more than a hundred workers in its television department last month.
The drastic cuts at Paramount will affect many purposes within the company, which seeks to reduce its annual prices by about $500 million. They will largely be completed by the end of September, the leaders said in their note.
In July, Paramount announced plans to merge with Skydance, the Hollywood studio that co-produced hits such as “Top Gun: Maverick” and “Mission: Impossible – Dead Reckoning Part One. “Skydance’s founder, Hollywood producer David Ellison, is the son of Larry Ellison, founder of software giant Oracle. Ellison’s family is spending heavily to fund a deal that includes $8 billion in equity.
As Paramount prepares its merger with Skydance, it is also exploring other options. The company has a 45-day viewing window, allowing it to see whether other suitors will outbid Skydance. Among those interested is Edgar Bronfman Jr. , the former executive leader of Warner Music Group, who submitted a bid for Paramount in recent days.
When Paramount reported earnings last week, executives told investors that its streaming business was profitable — a relatively rare occurrence in the traditional media industry — driven partly by the ad-supported streaming service Pluto TV. Paramount+, the company’s flagship streaming service, lost 2.8 million subscribers last quarter, which the company attributed to an exit from a bundle agreement in South Korea.
The media industry has witnessed a number of mergers over the past decade, most of which have led to fewer jobs in new conglomerates. Declining cable offerings, once the main engine of expansion for TV companies, have prompted executives to cut prices and partner with competitors to expand their content libraries.
These measures have done little for investors. Inventory costs for nearly every traditional media company have declined over the past five years as investors remain skeptical about the ability to pass on profits to upgrade cable.
Benjamin Mullin reports on data and entertainment from major corporations. Contact Ben securely on Signal at 1-530-961-3223 or by email at benjamin. mullin@nytimes. com. Learn more about Benjamin Mullin
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