During an earnings call on Thursday, Paramount Global plans to cut approximately 15% of its U.S. workforce in the next few weeks, as revealed by company executives.
This decision precedes an upcoming merger with Skydance Media, announced in July, which represents a significant milestone for the movie studio following their successful co-production of the 2022 Tom Cruise hit, “Top Gun: Maverick.”
Paramount Global employed 21,900 people worldwide, as of the end of 2023, but the company cut around 800 jobs in February. Additionally, to achieve long-term profitability Paramount is actively exploring “potential strategic partnerships” for its streaming service, Paramount+, and is in discussions with multiple parties. These efforts may involve licensing deals, joint ventures, or partnerships. The company is also reassessing its portfolio to enhance its balance sheet.
Paramount CO-CEO Chris McCarthy, said, “The set of assets that make up Paramount Global today were built up through the rise of linear and while we have strong brands and businesses, we must reshape our portfolio to best compete in the future. The assets under consideration are undeniably strong with exciting futures ahead, but will be better served on their own or as the centerpiece of another business.”
Paramount revealed a 13% year-over-year increase in direct-to-consumer revenue, in its second-quarter earnings report, reaching $1.8 billion. The company also reported an adjusted profit of $26 million, a significant turnaround from the $424 million loss recorded a year earlier. The improved income was credited to rising revenue and reduced expenses in marketing and content.
However, Paramount+ saw a decline of 2.8 million subscribers during the quarter, bringing the total to 68 million. The company attributed this drop primarily to its planned exit from a hard bundle agreement in South Korea. Paramount expects subscriber growth to rebound in the second half of the year, though it anticipates returning to net losses in the third and fourth quarters due to the timing of content releases.
Furthermore, from a sharp increase from the $250 million loss recorded a year earlier, Paramount reported an overall operating loss of $5.3 billion. The company attributed this significant change to a $5.98 billion “goodwill impairment” charge related to its cable networks division. This charge reflects the company’s reassessment of market value amid the Skydance offer and the ongoing decline in the pay TV sector.