Paramount Global's CEO, Bob Bakish, has revealed layoffs at the media firm, aiming to operate as a leaner company and spend less, as reported by CNBC on Thursday.
Workforce Reductions for Shared Services Expansion
In a memo to employees, Bakish stated, "Our priority is to drive earnings growth. And we'll get there by growing our revenue while closely managing costs - a balance that will require every team, division, and brand to be aligned." Bakish added that expanding the shared services model to streamline operations resulted in ongoing global workforce reductions.
Paramount did not reveal the number of job cuts and intends to decrease international content spending, the details of which will be shared on its quarterly earnings report at the end of February. The layoffs are part of a broader media industry trend to reduce costs. Recently, organizations like the Los Angeles Times, Business Insider, and Sports Illustrated have also implemented layoffs during a challenging period for the media sector.
Acquisition Speculations by Skydance Media
Paramount Global CEO Bob Bakish acknowledged the challenges Paramount faces, including a slow market, economic uncertainties, and disruptions from strikes by Hollywood writers and actors, which affected studio production over the summer.
Bakish encouraged employees at the entertainment conglomerate to concentrate on their 2024 business goals despite ongoing discussions about a potential acquisition by industry leaders and investment firms, along with increased speculation about imminent layoffs.
In a memo to employees on Thursday, Bakish recognized that Paramount's future is a subject of speculation, a nod to the fact that a group of investors led by Skydance founder David Ellison and Paramount's controlling shareholder, Shari Redstone, have explored a potential buyout of Redstone's investment vehicle, National Amusements Inc., with the idea of merging Paramount with Skydance, as per sources familiar with the matter. Warner Bros. Discovery has also informally approached Paramount, though it's uncertain whether WBD has become a serious contender.
According to Bakish, Paramount is a well-known public company in a closely monitored industry and believes the best approach is execution, which involves leaning into what's effective while continuously adapting to current realities.
Paramount's Future Plans
Bakish outlined a plan for Paramount that emphasizes creating impactful global content while reducing local and international originals, apart from leading free-to-air networks in Australia, Argentina, Chile, and the U.K. Bakish advocated for maximizing global hits across various platforms and revenue streams, including streaming, film, TV, and licensing to achieve the highest return on investment. He also indicated that the company will continue controlling costs in its streaming operations, responding to pressure from media investors to achieve profitability. In 2024, Paramount will focus more on significant markets like the U.S., U.K., Canada, and Australia, where they have a robust multi-platform presence and the highest revenue potential, encouraging increased collaboration across teams, time zones, and functions, focusing on cross-promotion, innovative partnerships, data, and insights.
Bakish didn't directly address the possibility of an acquisition or specify Paramount's response to a compelling offer. Still, Paramount has contemplated this option. In November, the company acknowledged in an SEC filing that it had implemented a plan to provide severance benefits to senior executives if terminated within two years of a change of control in the overall company.
