Paramount is slashing about 800 jobs as it faces challenges moving from traditional TV to streaming. Sources familiar with the plans indicate that about 3% of the workforce will be affected.
CEO Bob Bakish told employees that the workforce reduction is part of cost-cutting measures to "build our momentum and execute our strategic vision for the year ahead," in a memo seen by Reuters and Variety on Tuesday.
Paramount Global ended 2022 having approximately 24,500 employees, both full-time and part-time.
Long-Planned Workforce Reduction to Spend Less
The layoffs were not surprising, as Bakish mentioned that the company was considering reducing its workforce last month. Paramount Global has not yet responded to a request for comment from Fox News Business.
The affected employees span various areas within Paramount's portfolio, including the Paramount Pictures movie studio, CBS, and cable TV networks such as Comedy Central, MTV, Nickelodeon, and BET, along with the Paramount+ and Pluto TV streaming services.
The job cuts coincide with Paramount Global exploring merger and acquisition possibilities. CNBC reported that Paramount Global has recently engaged in initial merger discussions with Skydance Media and Warner Bros. Discovery.
The media company alerted employees in a January 25 internal memo about upcoming cuts. Bakish mentioned then that Paramount Global must "operate as a leaner company and spend less."
Super Bowl LVIII Blowout
The layoffs happened shortly after Paramount aired Super Bowl LVIII, attracting a record audience of 123.4 million viewers. Despite this event showcasing the reach of its CBS network, Paramount still grapples with financial challenges in other areas of its business.
Super Bowl 58, aired on CBS, was the most-watched TV show in history, with approximately 123.4 million viewers across all platforms. As reported by research firm Guideline, CBS set a new record by charging an average of $6.5 million for every 30-second advertisement during the Super Bowl, making tens of millions in extra revenue because the game between the Kansas City Chiefs and the San Francisco 49ers went into overtime.
CBS Sports reported that the game, also available on Paramount+ service, was the "most-streamed Super Bowl in history." The halftime show featured Usher and other artists like Alicia Keys and Ludacris.
Revenue Losses In The Past Years
The company's streaming division, which includes Paramount+ and Pluto TV, experienced a loss of over $1 billion in 2022 due to substantial content spending to compete with Netflix and similar services. Paramount's linear TV revenue dropped 8% last quarter, with advertising sales falling by 14% as more advertisers allocate their budgets to digital platforms.
Bakish is confident that the layoffs will help Paramount navigate the transition and emerge stronger. However, the job cuts highlight the challenges of adapting to the streaming era, where profitability is difficult to achieve. As a media giant originally built for the cable era, Paramount faces revenue declines and significant losses in the streaming business, amounting to billions of dollars.
