Paramount to Cut 800 Jobs Even as CEO Bakish Touts ‘Blockbuster’ Super Bowl
Paramount Pictures, the iconic American entertainment company, is set to lay off around 800 employees as it takes steps to cut costs and return to earnings growth, according to sources familiar with the matter. The decision comes just days after Paramount streamed Super Bowl LVIII, which was hailed as a “blockbuster” event showcasing the company’s cinematic power.
In an internal memo seen by Barron’s, Paramount Chief Executive Bob Bakish expressed that the company’s top priority is to revive its earnings growth. Paramount Global, the parent company, intends to eliminate jobs as part of a broader effort to streamline costs. The entertainment giant has experienced a decline in annual earnings since 2020.
Bakish acknowledged the unfortunate reality of the layoffs in the memo, stating, “This will require us to continue to grow revenue, while reducing costs. And unfortunately, part of streamlining costs means that today, we will begin the difficult process of saying goodbye to some of our very valued colleagues across Paramount.”
The job cuts, which represent around 3% of the total workforce, were announced internally and Paramount declined to provide further comment on the matter. The reduction in headcount is in line with Bakish’s previous announcement made in January that the company planned to reduce its staff size in order to spend less.
Despite the downsizing, Bakish highlighted the success of Super Bowl LVIII, which drew in a record-breaking 123.4 million average viewers across all platforms, making it the most-watched program in television history, according to CBS. The event served as a testament to the “full power of Paramount,” as Bakish described it.
However, shares of Paramount have seen a decline of 3.2% to $12.98, reflecting the challenges the company faces in a saturated and competitive entertainment market. Over the past year, the stock has experienced a significant drop of 42%.
As Paramount moves forward with its cost-cutting strategies and aims to increase revenue, the layoffs mark a difficult chapter for the company. It remains to be seen how these measures will impact Paramount’s ability to regain its earnings growth and navigate the rapidly evolving entertainment landscape.
Analyst comment
Negative news. As Paramount Pictures cuts 800 jobs to reduce costs and revive earnings growth, the market may face challenges due to the company’s declining annual earnings and the competitive entertainment market. The success of Super Bowl LVIII showcases the company’s power, but Paramount’s stock has dropped significantly, indicating further struggles ahead. The impact of the cost-cutting measures on Paramount’s ability to regain earnings growth and adapt to the changing industry remains uncertain.
