Paramount has announced a significant restructuring effort, which will result in the elimination of 15% of its US workforce, affecting approximately 3,000 employees. The decision comes on the heels of a disappointing second quarter earnings report, which saw the company’s total revenue fall short of expectations by $400 million.
In a memo to employees, Paramount’s CEOs acknowledged the need for change in the face of a rapidly evolving industry. The company is at a critical juncture, and the layoffs are intended to position Paramount for long-term success.
The layoffs will be implemented in three stages, with the majority of cuts taking place by the end of September. The marketing and communications departments will be disproportionately affected, although the company’s legal and finance teams will also face reductions.
This is not the first time Paramount has reduced its workforce in recent months. In February, the company laid off 3% of its employees, despite a 3% increase in revenue growth. The latest round of layoffs is a more drastic measure, and it is likely that the company is seeking to streamline its operations ahead of its planned merger with Skydance.
The merger, which was announced in June, is expected to undergo regulatory review in the coming months. In preparation for the deal, Paramount has been making significant changes to its business, including raising prices for its streaming service and removing content from its library. While these moves may make sense from a corporate perspective, they have been met with skepticism by some industry observers.
