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Paramount Global will cut 15% of its US-based workforce starting immediately, the media company confirmed in an internal memo Tuesday.
The owner of networks including CBS and Comedy Central, Paramount previously revealed a plan in June to cut costs by $500million.
The layoffs will affect roughly 2,000 staff across the US in three phases. The first phase started Tuesday and will continue until the end of the year, with 90% of the layoffs set to be completed by the end of September.
Paramount earlier announced the layoffs on a post-earnings call last week, having previously cut 3% of its workforce in February 2024.
Why is Paramount laying off employees?
The memo, sent by Paramount’s three co-CEOs Chris McCarthy, Brian Robbins, and George Cheeks, said the layoffs were difficult, but necessary as the industry “continues to evolve.”
“Paramount is at an inflection point where changes must be made to strengthen our business,” they wrote.
The media giant has struggled with the declining value of its cable TV networks, which it wrote down by $6billion as it prepares for a merger with Skydance Media.
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As the business pushes for profitable growth, McCarthy, Robbins, and Cheeks confirmed the layoffs would focus on “redundant functions and streamlining corporate teams,” with cuts set to take place across each division.
The co-CEOs acknowledged in their memo that some staff who had been “instrumental” to the company’s success would be let go.
“In partnership with our HR leaders, we are committed to providing support to employees transitioning on from Paramount and to our teams who will need to adapt to these changes,” the memo said. “During this time, we ask that everyone please be mindful of how this news may affect your colleagues and offer support to those who need it.”
Paramount’s co-CEO model draws scrutiny
With the Skydance Media merger only set to be completed further into 2025, Paramount’s unusual executive team hopes their changes are enough to continue cutting costs in line with their plans to strengthen the financial health of the business, but admit the future is uncertain.
“We understand that you may have questions about next steps, and while we may not be able to provide all the answers at this time, we will continue to update you on our progress,” they wrote.
In April, the company took the unusual step to succeed outgoing CEO Bob Bakish with what the company called an “Office of the CEO.”
The company noted in a statement at the time that the three executives would work closely with Paramount CFO Naveen Chopra and the Board.
“The new leadership is working with the Board to develop a comprehensive, long-range plan to accelerate growth and develop popular content, materially streamline operations, strengthen the balance sheet, and continue to optimize the streaming strategy,” the company stated.
But with the lay-offs centering on the elimination of redundant teams, some have criticized the company’s leadership model.
“How ironic that the "co-CEOs" claim that the layoff was about reducing "redundant functions”,” one individual wrote on a Reddit forum about the layoffs.
“What I can't understand is continuing with the shit leadership, what does it take for Paramount Global to start taking heads?” another commented.
Some users also suggested that Paramount’s heavy investment in Paramount+, the company’s subscription-based streaming service, has been largely unsuccessful and come at the expense of its traditional film and TV media production channels.
“Like everyone else, they went in over their heads with streaming, which has weakened the box office and diminished movies and tv as must see cultural event,” one person claimed. “Basically everyone got greedy and now the bubble has burst.”
Paramount will also shutter its Paramount Television studio as a part of the restructuring.
Memo in full
Read the full memo, below:
Hi Everyone,
In June, we laid out our Strategic Plan to return Paramount to profitable growth, which includes streamlining the organization and cutting costs by $500 million on an annualized basis. As we continue to advance our plan, we announced on our earnings call last week that we will be reducing our US-based workforce by approximately 15%, focusing on redundant functions and streamlining corporate teams.
This process will take place in three phases, starting today and continuing through the end of the year. We expect 90% of these actions to be complete by the end of September.
We know that having to part ways with teammates whose contributions have been instrumental to our success is incredibly hard. In partnership with our HR leaders, we are committed to providing support to employees transitioning on from Paramount and to our teams who will need to adapt to these changes. During this time, we ask that everyone please be mindful of how this news may affect your colleagues and offer support to those who need it.
The industry continues to evolve, and Paramount is at an inflection point where changes must be made to strengthen our business. And while these actions are often difficult, we are confident in our direction forward. We understand that you may have questions about next steps, and while we may not be able to provide all the answers at this time, we will continue to update you on our progress.
We remain ever grateful for your hard work in delivering results for our audiences and communities.
Best,
George, Chris & Brian
