Why is Paramount Global laying off 15% of its US employees? Details explored amid Skydance merger

Paramount Global has announced that they will be laying off 15% of their employees in their US workforce. As per Variety, the company has informed its employees that the layoffs will likely take place in the next few weeks. Amidst its merger with Skydance Media, a total of 2000 employees are set to lose their jobs.

The layoffs are happening due to Paramount's massive operating losses, as Variety has reported that there has been a $5.98 billion write-down on the value of its cable TV networks. Hence, the company has decided to cut off a substantial number of employees, mainly to reduce its costs.

Furthermore, its merger with Skydance Media demanded that the company reassess its value, profits and losses, which made the company realise the write-down. For the same, Inquirer reported that employees from finance, legal, technology and support functions are likely to face the brunt of the layoffs.

It's also worth noting that the merger between Paramount and Skydance Media was announced in July 2022. It took place because of the decline in the financial assets of Paramount, mainly because of the issues with the Paramount+ streaming services.

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“These are difficult decisions to make”: Paramount Global Co-CEO Chris McCarthy confirms the layoff of over 2000 employees

Ahead of its ongoing merger with Skydance Media, Paramount Global’s layoffs have left employees shocked and under pressure.

Deadline reported that the news about laying off 2000 employees has also been confirmed by the CEO of the entertainment group. In a statement, Co-CEO Chris McCarthy said:

“As you can imagine, these are difficult decisions to make. We have incredibly talented people at Paramount, and these actions are not reflections of their contributions. Rather, they are necessary to transform our organization for the future.”

Informing that the layoffs will likely be taking place in the next few weeks, they will be completed by the end of the year. The CEO also highlighted that the activity of cutting down manpower was hinted at in June after the company said that they could save millions by reducing their employee count.

The company's streaming division, which encompasses the Paramount+ subscription platform and its free, ad-supported counterpart, PlutoTV, together reported an income of $26 million for the second quarter. However, the CEO and the executives said that there has been a recorded loss of over $426 million last year.

As per Hollywood Reporter, Skydance Media will bring on board more technology and exposure, which could benefit Paramount Global in many ways. As the news about the layoffs continues to go viral, social media is abuzz with reactions, but the company is yet to release a formal statement.