Paramount Global, the storied media conglomerate, announced Thursday it will lay off 15% of its US staff and write down $6 billion in value of its cable television networks as it prepares to merge with Skydance Media.
The layoffs, which will affect around 2,000 staffers in the coming weeks, are part of Paramount’s bid to trim $500 million in annual costs companywide ahead of its merger with technology scion David Ellison’s SkyDance.
The layoffs will see the elimination of “redundant functions” in marketing and communications and the reduction of headcount in finance, legal, technology, and other support functions, Paramount co-chief executive Chris McCarthy said.
Paramount, which controls a vast cable and television portfolio, said the writedown of its TV business “is primarily as a result of recent indicators in the linear affiliate marketplace, and the estimated total company market value indicated by the Skydance transactions.”
The announcement is the latest painful sign of the dramatic changes impacting the traditional television business as consumers rapidly shift away from the cable bundle in favor of streaming services.
On Wednesday, Warner Bros. Discovery, the parent company of CNN, TNT, HGTV and other cable networks, posted a $9.1 billion write down on its television business.
“It’s fair to say that even two years ago, market valuations and prevailing conditions for legacy media companies were quite different than they are today,” WBD chief executive David Zaslav said on a call with investors. “And this impairment acknowledges this.”
The recent turbulence in the media business extends well beyond the traditional television industry, affecting digital news outlets and print publications.
In recent days, Axios announced it would lay off 10% of its staff, or around 50 employees, making the first time the news outlet has conducted layoffs in its history, amid what it described as “changes in the media business.”
“This is a painful but necessary move to tighten our strategic focus and shift investment to our core growth areas. We’re making some difficult changes to adapt fast to a rapidly changing media landscape,” Axios chief executive Jim VandeHei wrote in a memo to staff obtained by CNN, calling it “the most difficult moment for media in our lifetime.”
Also this week, the venerable TV trade magazine Broadcasting+Cable, which was founded in 1931, announced it would shutter over what its parent company described as a “rapid transformation” of the industry.
As profits in the television business have eroded away, Paramount has been hit particularly hard. The iconic company, which owns a slate of cable networks including Nickelodeon, Comedy Central and MTV, has seen its valuation plunge amid the turmoil, with shares of Paramount falling nearly 80% in the last five years.
Still, there have been a few bright spots in recent days.
Paramount said its streaming service Paramount+ posted a $26 million profit after losing $424 million during the same period last year and said it expects subscriber growth in the second half of the year.
Warner Bros. Discovery reported its HBO, Max and Discovery+ streaming services added 3.6 million new subscribers in the latest quarter as it continues to expand around the world, for a total of 103.3 million global subscribers.
