Paramount, the parent company of CBS, Nickelodeon and MTV, told its employees Tuesday it was beginning a series of long-scheduled job cuts that would winnow its staff by about 15% in the United States.
The company’s three co-CEOs said in an internal note that the cuts — which would be “incredibly hard” — were necessitated by shifts in the entertainment industry.
“The industry continues to evolve, and Paramount is at an inflection point where changes must be made to strengthen our business,” said the note from Brian Robbins, the head of Paramount Pictures; George Cheeks, the head of CBS; and Chris McCarthy, the head of Showtime and MTV Entertainment Studios.
The layoffs, which will affect thousands of employees, are the latest in a series of cutbacks by major media players. Warner Bros. Discovery, the parent of CNN, TNT and HBO, has slashed its staff routinely in recent years as it pays down billions in debt. Disney laid off more than 100 employees in its TV division last month.
The sweeping cuts at Paramount will affect many functions across the company, as it seeks to reduce its annual costs by about $500 million. They will largely be completed by the end of September, the CEOs said in their note.
In July, Paramount announced plans to merge with Skydance, the Hollywood studio that has 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 the software giant Oracle. The Ellison family is spending lavishly to finance a deal that includes $8 billion in capital.
While Paramount readies for its merger with Skydance, it is also exploring other options. The company has a 45-day “go shop” window, allowing it to see if other suitors will top Skydance’s bid. Among the interested parties is Edgar Bronfman Jr., the former CEO of Warner Music Group, who has been pursuing 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 been through a series of mergers over the past decade that have mostly resulted in fewer jobs for people at the new conglomerates. The shrinking of the cable bundle, once the main growth engine for TV companies, has prompted executives to cut costs and team up with rivals to beef up their content libraries.
Those moves have done little for investors. The share prices of almost every traditional media company are down over the last five years, as investors remain skeptical that profits from streaming will replace those from cable.
This article originally appeared in The New York Times.
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