Paramount Global, the media conglomerate that owns CBS, Paramount Pictures, and various cable networks, announced on Tuesday that it will be laying off approximately 800 employees. This news comes just one day after CBS reported record-breaking viewership for the Super Bowl. The layoffs are expected to affect about 3% of Paramount’s workforce, which currently stands at around 24,500 employees.
In an internal memo to employees, CEO Bob Bakish explained that these adjustments are necessary to build on the company’s momentum and execute its strategic vision for the year ahead. While the news may be disheartening for those affected, Bakish expressed optimism about the future and stated that there is much to be excited about.
The announcement of the layoffs caused a decline in Paramount’s stock price, with shares falling by about 4% during morning trading on Tuesday. This news comes as no surprise, as reports of impending job cuts had already surfaced in January.
Paramount Global has been exploring merger and acquisition options in recent months. The company has held talks with Skydance Media and Warner Bros. Discovery, indicating its intention to expand its presence in the media industry. These discussions may have played a role in the decision to downsize the workforce and operate as a leaner company.
One of the factors contributing to the need for cost-cutting measures is Paramount’s streaming service, Paramount+. Despite its popularity among viewers, the platform continues to incur losses each quarter. In the third quarter of 2022 alone, Paramount+ reported a loss of $238 million. The company’s upcoming fourth-quarter earnings report, scheduled for February 28, will shed more light on its financial performance.
Despite the challenges faced by Paramount Global, the Super Bowl provided a significant boost to CBS’s revenue. Super Bowl 58 was the most-watched television show in history, attracting an estimated 123.4 million viewers across all platforms. CBS charged a record high average of $6.5 million for every 30-second advertisement during the game, contributing to the network’s substantial earnings. Additionally, the game’s overtime period generated even more revenue for CBS, totaling tens of millions of dollars.
While the layoffs at Paramount Global may be seen as a setback for the company, it is important to remember that they are part of a broader strategy to position the company for long-term success. By streamlining operations and reducing costs, Paramount Global aims to strengthen its position in the media landscape and capitalize on future opportunities. As Bakish stated in his memo, there is much to be excited about, and these adjustments will help the company execute its strategic vision for the year ahead.
