Paramount Global has announced a significant restructuring plan to address the changing dynamics in the media industry. As part of this initiative, the company will lay off 15 percent of its US workforce and write down $6 billion in value from its cable television networks. These actions are being taken as Paramount prepares for a merger with Skydance Media which is expected to reshape the company’s future in the rapidly-evolving media landscape.
The layoffs, expected to affect around 2,000 employees in the coming weeks, are part of an effort to reduce $500 million in annual costs in preparation for the merger. They will primarily target ‘redundant functions’ in areas such as marketing, communications, finance, legal, and technology.
The $6 billion writedown in value of Paramount’s cable television networks reflects the challenges the company faces in the current media environment. The decline is largely attributed to recent trends in the linear affiliate marketplace, where traditional television networks have struggled to maintain their foothold as consumers increasingly shift away from cable bundles in favor of streaming services.
These changes are not unique to Paramount. Other media organizations have also announced cost-cutting measures in recent weeks. For example, Axios, a digital news outlet, revealed plans to lay off 10 percent of its staff, marking the first time the company has conducted layoffs in its history. The decision was framed as a necessary step to refocus the company’s strategy and invest in core growth areas.
Paramount’s challenges are indicative of the broader difficulties facing the television industry. The company, known for its iconic cable networks such as Nickelodeon, Comedy Central, and MTV, has seen its valuation plummet in recent years. Furthermore, shares of Paramount have fallen nearly 80 percent over the last five years, reflecting the company’s struggles to adapt to the new media environment.
However, there have been some positive developments for Paramount. The company reported that its streaming service, Paramount+, achieved a $26 million profit in the latest quarter, a significant improvement from the $424 million loss recorded during the same period last year.
