Paramount Global revealed on Thursday its plan to lay off 15% of its U.S. workforce and write down $6 billion from the value of its cable television networks as the company prepares for its upcoming merger with Skydance Media.
The decision will affect around 2,000 employees over the coming weeks, according to CNN.
Paramount, which owns slate of cable networks such as MTV and Nickelodeon, aims to reduce $500 million in annual expenses before merging with Skydance Media, led by technology mogul David Ellison.
The layoffs will target overlapping roles in marketing and communications, along with downsizing in departments such as finance, legal, technology, and other support areas, according to Paramount’s co-chief executive, Chris McCarthy.
The company, which owns a broad range of cable and television assets, attributed the $6 billion write-down to recent trends in the linear affiliate market and the overall market valuation reflected in the Skydance transactions.
Just a day earlier, Warner Bros. Discovery, which owns CNN, TNT, and HGTV, among other networks, reported a $9.1 billion write-down in its television division.
The media industry’s volatility has also impacted digital news outlets and print media.
Recently, Axios revealed it would be laying off 10% of its staff, or about 50 employees, marking the first layoffs in the company’s history. The company cited “changes in the media business” as the driving force behind the decision.
Jim VandeHei, CEO of Axios, described the situation in a memo to staff, calling it “the most difficult moment for media in our lifetime” and called for the need to “adapt fast to a rapidly changing media landscape.”
Paramount Global has been particularly affected by the shrinking profitability of the television business. The company’s stock has plummeted nearly 80% over the past five years, as it grapples with the broader challenges facing the media industry.
Despite this, Paramount reported that its streaming service, Paramount+, turned a $26 million profit in second quarter, the first quarterly profit in three years and a significant improvement from the $424 million loss it posted during the same period last year. The company also anticipates continued subscriber growth in the latter half of the year.
Warner Bros. Discovery also reported gains, with its HBO, Max, and Discovery+ streaming platforms adding 3.6 million new subscribers in the latest quarter, bringing its global total to 103.3 million.
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