Paramount is making deep cuts to its workforce starting Tuesday as the Hollywood entertainment titan looks to slash costs.
Paramount co-CEOs Chris McCarthy, Brian Robbins, and George Cheeks made the announcement in a memo to employees, stating that the layoffs will occur in three phases. A total of nearly 2,000 jobs, 15% of Paramount’s workforce, is planned to be cut by the end of 2024.
The first wave of layoffs starts on Aug. 13, and 90% of the cuts will be done by the end of September.
“The industry continues to evolve, and Paramount is at an inflection point where changes must be made to strengthen our business. And while these actions are often difficult, we are confident in our direction forward,” the co-CEOs said in their memo. “We understand that you may have questions about next steps, and while we may not be able to provide all the answers at this time, we will continue to update you on our progress.”
Last month, controlling shareholder Shari Redstone decided to leave the company her family has headed for over three decades when she reached an $8 billion deal with tech giant David Ellison. Ellison’s Skydance Media, along with RedBird Capital Partners and Ellison’s father, Larry, are set to take control of Paramount Global next year.
Earlier this year, Paramount laid off 800 employees, or roughly 3% of its workforce.
Paramount Global has been struggling to overcome a hit to its once-solid base of profits: cable TV. Composed of television networks including CBS, MTV, Nickelodeon, and Comedy Central, Paramount Global is home to popular film franchises such as Top Gun and Mission: Impossible and the hit television show Yellowstone.
However, the company’s long-standing success hasn’t been able to shield it from the rise of Big Tech streaming services. Last week, Paramount Global took a $6 billion write-down on its cable TV business , the day after Warner Bros. Discovery did the same for $9 billion. Their move came after YouTube stole the largest share of TV for a streaming platform ever in May, according to Nielsen’s monthly Gauge report.
The mass layoffs indicate the struggles the entertainment industry faces as it adapts to a changing environment. It could also feed into fears many people share that the country has taken a negative economic downturn.
The majority of people believe the United States is in a recession, according to a poll conducted in May. An additional 49% believe unemployment is at a 50-year high, although federal data belie consumer sentiment.
While streaming services from Big Tech companies such as Amazon may be cutting into cable TV’s profits and forcing them to cut costs, Silicon Valley players have also been conducting mass layoffs. Highly publicized job cuts from companies, including Microsoft, Google, Meta, and Amazon, have fed into concerns that the economy isn’t in stellar condition.
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More than 130,000 workers at tech companies have lost their jobs in 2024, according to a Layoffs. fyi tally. That comes after more than 191,000 workers in U.S.-based tech companies were laid off in 2023.
A JUST Capital survey released following mass layoffs in 2023 found that 71% of the public believed the workforce cuts hurt the economy.
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