Paramount Global to Lay Off 15% of Jobs

Paramount Global has announced a significant reduction in its U.S. workforce, cutting approximately 2,000 jobs, or 15% of its staff, as part of a strategic cost-cutting initiative in anticipation of its merger with Skydance Media. The company aims to achieve $500 million in cost savings, contributing to a broader goal of realizing $2 billion in synergies from the merger, which was agreed upon last month. Despite the workforce cuts, Paramount reported a surprising profit in its streaming division, marking the first profitable quarter for its direct-to-consumer business. However, the company’s overall second-quarter revenue fell to $6.81 billion, missing analyst expectations of $7.21 billion, primarily due to declines in licensing, TV advertising, and cable subscription sales. The revenue drop of 11% was attributed to a decrease in TV licensing revenue, which can be challenging for analysts to predict. In a notable development, Paramount+ experienced a decline in subscribers, losing 2.8 million customers to reach a total of 68 million. This drop was linked to the unwinding of a partnership with CJ ENM's Tving streaming platform in Korea. Analysts had anticipated a loss of $265 million for the quarter, but Paramount remains optimistic about achieving U.S. profitability for Paramount+ by 2025, supported by recent price increases and reduced content spending. The company’s quarterly profit was bolstered by the absence of an NFL licensing charge, which is expected to impact future earnings as the merger with Skydance progresses.