Major Job Cuts Ahead: Paramount Skydance to Lay Off 1,000 Staff This Week, More Reductions on the Horizon

Layoffs are on the horizon at Paramount Skydance. This week, the company plans to cut about 1,000 jobs in the U.S. Notably, more layoffs might follow as part of a broader strategy to reduce the workforce by around 2,000 overall, including international roles.

Insiders suggest these cuts were anticipated even before the merger of Skydance and Paramount Global. They’re part of a larger effort to cut costs by over $2 billion. During an August press conference, Jeff Shell, now the president of Paramount Skydance, emphasized that swift cost reductions and layoffs were essential. The company’s third-quarter earnings report will detail these changes, set to be released on November 10.

David Ellison, the CEO, has ambitious plans. He has expressed interest in acquiring Warner Bros. Discovery, which could position Paramount to better compete with streaming giants like Netflix and Apple. However, Warner Bros. has thus far declined his offers.

Since taking the helm at Paramount, Ellison has invested heavily in exclusive content. The company recently spent $7 billion on UFC rights and attracted the creators of “Stranger Things,” the Duffer Brothers, with a four-year exclusive deal. However, some actions have sparked controversy, including the purchase of the right-leaning outlet The Free Press.

Despite these initiatives, Paramount faces challenges common to the media industry. Viewership is declining as audiences move away from traditional cable towards streaming services. The theatrical film market continues to struggle in the wake of the pandemic, impacting revenue.

Insights

A recent survey by PwC revealed that 53% of consumers are cutting back on subscription services, indicating a shift in how viewers consume media. This change could exacerbate challenges for companies like Paramount as they navigate a changing landscape.

Many users have taken to social media to express their feelings about the layoffs. Reactions range from concern for affected employees to discussions about the future of entertainment, with many pointing out the need for the industry to innovate.

For more about the job market and corporate strategies during mergers, you can see this detailed report by Bloomberg.

The entertainment industry is at a crossroads. As companies like Paramount Skydance seek to evolve, they must adapt to an audience that demands more—a challenge that will define the future.

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David Ellison,Paramount Skydance