Approximately 2,000 staff impacted. Leadership expects Skydance transaction to close in first half of 2025.
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Paramount Global leadership reported a $5.99 billion write-down of the cable business as they acknowledged the ongoing decline in linear TV and prepared for the transaction with Skydance Media.
The company’s mixed second quarter brought an 11% revenue drop, with the streaming business swinging into profit during the period ended June 30. Co-CEOs Brian Robbins, George Cheeks, and Chris McCarthy announced they will start to lay off 15% of the US-based workforce in the coming weeks, approximately 2,000 people, as part of a plan to achieve $500 million in cost savings.
The layoffs will affect staff in marketing and communications, finance, legal, technology, and other support functions and are expected to be completed by the end of the year. In addition, the company laid off approximately 800 staff in February.
The company’s revenue fell to $6.8 billion, below Bloomberg consensus estimates of $7.24 billion, and net loss of $5.3 billion was mainly due to the impairment charge. However, adjusted earnings per share reached 54 cents, surpassing the estimated 12 cents.
Streaming segment subscriptions tumbled by 2.8 million to 68 million, with the company attributing this largely to its planned exit from a hard bundle agreement in South Korea. Despite this decline, the direct-to-consumer business swung into profit, with revenue growing 13% to $1.9 billion.
Paramount+ revenue grew 46%, driven by year-over-year subscriber growth and a 26% increase in average revenue per user expansion. The co-CEOs are exploring partnerships for the platform and expect it to become profitable in the US in 2025.
The company will continue to explore options for its go-shop window, which will expire on August 21, and is expected to complete the Skydance transaction in the first half of 2025.
Conclusions:
The recent quarterly report from Paramount Global highlights the significant changes taking place in the media and entertainment landscape. The company’s decision to lay off approximately 2,000 staff members signals a shift towards a more streamlined and cost-efficient structure.
The success of Paramount+ will be crucial in driving growth for the company, and the co-CEOs’ efforts to explore partnerships and achieve profitability in the US will be closely watched.
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