Paramount Announces Layoffs, Slashing 3.5% of U.S. Staff

• Paramount Global (PARA) is cutting 3.5% of its U.S. workforce, impacting approximately 651 of its 18,600 employees, to streamline operations amid a decline in cable TV subscribers, with potential future layoffs for non-U.S. staff.
• The company faces challenges in a “generational disruption” as consumers shift to streaming platforms like Netflix (NFLX), prompting a 15% workforce reduction in August and a proposed $8.4 billion merger with Skydance Media.
• The merger’s regulatory approval is delayed due to a $10 billion lawsuit filed by President Donald Trump against CBS News, alleging deceptive editing, adding uncertainty to Paramount’s restructuring efforts.

Reuters reports that Paramount Global (PARA) is implementing a 3.5% reduction in its U.S. workforce, affecting approximately 651 employees based on its reported 18,600 staff as of December 31, 2024, as part of efforts to address the ongoing decline in cable TV subscribers. The layoffs, announced in an internal memo from co-CEOs George Cheeks, Chris McCarthy, and Brian Robbins on Tuesday, follow a previous 15% workforce cut in August and may extend to non-U.S. employees in the future. The memo described the reductions as necessary to streamline operations amid a “generational disruption” in the media industry, driven by millions of consumers shifting from cable to streaming platforms like Netflix (NFLX).

The company’s strategic response to these market shifts includes a proposed $8.4 billion merger with Skydance Media, led by billionaire scion David Ellison, which aims to bolster Paramount’s position in the evolving media landscape. However, the merger awaits regulatory approval, complicated by a $10 billion lawsuit filed by President Donald Trump in October against CBS News, a Paramount subsidiary, alleging deceptive editing in an interview with then-Vice President Kamala Harris. This legal challenge adds uncertainty to Paramount’s restructuring efforts, as the company navigates both operational and financial hurdles.

The broader media industry is undergoing significant transformation, with traditional cable providers losing ground to streaming services that offer greater flexibility and content variety. Paramount’s layoffs reflect a broader trend among legacy media companies to cut costs and realign resources toward digital platforms, such as its own Paramount+ streaming service, to capture shifting consumer preferences. The co-CEOs emphasized the necessity of these measures to ensure long-term competitiveness, but the workforce reductions highlight the challenges of balancing cost efficiencies with innovation in a rapidly changing market. As Paramount awaits the outcome of its merger and legal proceedings, its ability to adapt to the streaming-dominated landscape will be critical to its future stability.

Price Action: Paramount, with a market cap of $8.52 billion, is trading marginally lower at $11.99 in premarket trading on Tuesday. Despite this, the company remains up nearly 15% year to date.

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