Paramount 800 Employees Firing: After CBS’s Super Bowl broadcast, which attracted over 123 million people across all platforms, Paramount Global stated that it will be laying off over 800 workers, or roughly 3% of its staff. CEO of Paramount Bob Bakish announced the decision in an internal message, emphasising that the layoffs are necessary to move the firm back towards profitability growth.
Variety claims that Bakish reaffirmed in his message how crucial this move is to Paramount’s future.He said, “I am confident this is the right decision for our future,” highlighting how important these changes are to maintaining the company’s momentum and carrying out its strategic plan for the following year.
Even with the positive outlook for the future, Paramount’s stock has dropped by almost 13% since the start of the year and another 4% after the layoffs were revealed.
This action is not surprising because Bakish had informed staff members in a memo dated January 25 about the upcoming job reduction. He made clear in the correspondence that Paramount intended to run as a smaller organisation by emphasising the necessity for the corporation to save costs and run more effectively.
Paramount 800 Employees Firing
Given that Paramount has been suffering large losses in its streaming division, cost-cutting measures are more urgently needed. The direct-to-consumer (DTC) division had a $238 million loss in the third quarter alone, despite some reduction in losses. In terms of adjusted operational profit, the DTC segment lost over $1.2 billion in the nine months that concluded on September 30. The film division also lost $143 million in the same time.
Regarding television, Paramount’s adjusted operating earnings fell by 12% year over year to $3.6 billion, mostly as a result of a 14% reduction in linear ad income.
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The Impact
Paramount’s financial situation is dire, with about $15.6 billion in long-term debt and only about $1.8 billion in cash on hand.
The news of these layoffs comes at the same time when speculation about possible Paramount mergers and acquisitions is circulating. According to reports, media tycoon Byron Allen has put in a proposal of $14.3 billion to buy all of the company’s outstanding shares. In addition, Warner Bros. Discovery, Apollo Global Management, and RedBird Capital have expressed interest in possible transactions.
Bakish addressed these rumours and reaffirmed Paramount’s willingness to look into potential dealmaking.”We are constantly exploring alternative methods of generating shareholder value, which may involve transactions,” he said, indicating the organization’s openness to exploring different approaches for expansion and improvement.
On February 28, Paramount is expected to release its earnings reports for the fourth quarter and full year 2023, including further details about its financial standing and expectations.
