The entertainment conglomerate behind Paramount Pictures is to cut about 2,000 jobs in a bid to reduce costs ahead of a merger with the independent film studio Skydance.
Paramount Global, which also owns CBS, Nickelodeon and the UK’s Channel 5, announced plans to cut about 15% of its US workforce alongside its latest earnings on Thursday.
The company, which has been hit hard by the decline of cable TV, wrote down the value of its cable networks by nearly $6bn, even as the company’s streaming business reported its first quarterly profit.
The impairment reflects a shrinking audience for cable TV networks such as Nickelodeon, MTV and Comedy Central, a decline that translates to lower advertising revenue. The announcement comes a day after Warner Bros Discovery took a $9bn write-down on its TV assets.
The pending merger with Skydance Media forced Paramount to reassess the value of each of its units to better reflect their worth to the company, resulting in the write-down. The magnitude of the reconciliation dragged Paramount into an operating loss of $5.3bn for the second quarter.
Absent this charge, the media company would have reported an adjusted operating income of $867m, or 54 cents a share, ahead of Wall Street’s forecasts of per-share earnings of 12 cents, according to LSEG.
The company’s streaming business, which includes the Paramount+ subscription service and its free, ad-supported sibling, PlutoTV, posted its first quarterly profit, fueled by growth in subscription and ad revenue. The direct-to-consumer unit reported an operating income of $26m in the second quarter, compared with a loss of $424m a year ago.
“We are on track to reach domestic profitability for Paramount+ in 2025,” the Paramount co-CEOs, George Cheeks, Chris McCarthy and Brian Robbins, said in a joint statement.
Paramount stock rose 6% in extended trading.
Reuters contributed reporting
