Paramount Cuts 1,600 Jobs Amid Leadership Overhaul Led by David Ellison

After combining his production company, Skydance Media, with Paramount in August in an $8-billion deal that removed the Redstone family from the entertainment industry, David Ellison, the chairman and CEO of Paramount, spoke directly to Wall Street for the first time on the conference call with analysts on November 10.

Ellison announced a plan to lay off an additional 1,600 employees and an optimistic financial forecast for the upcoming year as he celebrated his 96th day at Paramount. Reversing decades of programming underinvestment will be one of Ellison's key concerns. Next year, Paramount intends to spend $1.5 billion more on programming, which would include almost increasing the number of films it releases. In the upcoming year, the Melrose Avenue studio plans to increase production from eight releases to fifteen.

Ellison Aims to Expand Paramount’s Tech Nexus

Another focus is investing in technology, which Ellison called one of its "north stars". With the economics of Paramount's once-profitable cable television division—which includes Nickelodeon, MTV, and Comedy Central—collapsing, executives plan to create the streaming service Paramount+. The CBS broadcast network and CBS stations are also owned by Paramount. Although officials declined to disclose the exact amount, Paramount said that it will be raising the cost of its streaming subscriptions. Paramount+ plans are currently available for $7.99 and $12.99 per month. This year, it wants to make money from its streaming business.

According to Paramount, the 1,600 layoffs were caused by the company's late-last-month selling of television stations in Argentina and Chile. Additionally, 1,000 jobs were lost last month, mostly in the United States. The business stated that increasing operational efficiency was one of its objectives. Before the Ellison family took over, the company laid off approximately 800 employees in June, which accounted for roughly 3.5% of its staff.

Ellison and his group have been trying to cut 15% of the company's employees. Executives at Paramount stated on Monday that they should be able to decrease costs by roughly $3 billion, which is $1 billion more than was first stated. The organisation wants to finish cutting costs in two years.

Paramount’s Proposed Merger

The earnings announcement coincides with Paramount's pursuit of Warner Bros. Discovery, a proposed merger that would combine two of Hollywood's original film studios. Additionally, Paramount plans to boost its size by acquiring the historic Warner Bros. studio lot in Burbank, the HBO Max streaming service, a wider range of cable channels, and the first cable news service, CNN. Executives at Paramount declined to talk about the business's relations with Warner Bros. Discovery, which has turned down three offers, including one for the full company worth $58 billion.

The billionaire Larry Ellison, Ellison's father, has consented to support Paramount's offer. Paramount's third-quarter total revenue of $6.7 billion was unchanged from the same period last year. For the quarter, Paramount recorded a net loss of $257 million. Although 1.2 million of those customers take advantage of free trials, Paramount+ and other streaming services saw a 1.4 million membership increase to 79 million. Pluto TV and other streaming services saw a 17% increase in quarterly revenue.