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Paramount Global, the parent company of CBS, MTV, and Nickelodeon, announced on Tuesday that it will begin laying off about 15% of its U.S.-based staff starting today — about 2,000 positions.
The media giant’s co-CEOs Chris McCarthy, Brian Robbins, and George Cheeks told staff in an internal memo that the cuts will be made in three phases spread out through the end of the year. They expect 90% of the cuts to be made by the end of September.
“The industry continues to evolve, and Paramount is at an inflection point where changes must be made to strengthen our business. And while these actions are often difficult, we are confident in our direction forward,” the CEOs said in the memo obtained by Quartz.
As part of the layoffs, Paramount is shutting down its television studio by the end of the this week, according to The Hollywood Reporter. Paramount Television Studios president Nicole Clemens is set to leave the company and the studios’s existing projects will move over to CBS Studios.
Paramount’s job cuts follow layoffs at rival media companies like Warner Bros. Discovery, and Disney, all of which are navigating the changing media landscape where streaming is overtaking traditional TV.
Bringing down costs
The layoffs are part of a company initiative to make $500 million in cost-savings by the end of the year.
Paramount Global’s “Office of the CEO” — a trio of division heads that took over from former CEO Bob Bakish in April — said in June that near-term cuts would include layoffs .
Paramount Pictures and Nickelodeon CEO Brian Robbins said, at the time, that the plan “looks forward to build back the best of Paramount by delivering higher revenue with lower costs, which translates to higher earnings and better returns.”
In today’s letter, the CEOs said the lay offs would focus on “redundant functions and streamlining corporate teams.”
Last week, Paramount announced that streaming business reported its first quarterly profit, however, the company’s overall revenue fell 11% year over year to $6.8 billion in the three months ending June 30. This was due primarily to a decrease in licensing and advertising revenue generated by the company’s traditional TV networks.
By the end of June, Paramount’s long-term debt was at $14.8 billion.
Preparing for looming merger with Skydance
The cuts also come as Paramount prepares for its upcoming merger with Skydance Media, the movie studio behind the blockbuster “Top Gun: Maverick.”
In July, Paramount announced it had agreed to a deal with the Hollywood studio, headed by David Ellison, son of Oracle co-founder and billionaire Larry Ellison.
As part of the deal, Paramount chair and media heiress Shari Redstone will turn over her family’s National Amusements, which hold a majority of Paramount’s voting stock, for $2.4 billion.
Skydance will then merge with Paramount in an all-stock transaction valued at $4.75 billion. Skydance’s investor group will also add $1.5 billion to Paramount’s balance sheet to help pay down debts.
Paramount’s 45-day go-shop period, where its allowed to seek a better deal, is set to end this month.