The Plan to Save Paramount: More Layoffs and Another Streaming Bundle
Paramount Global needs to (further) reduce its staff size to compete in today’s cutthroat media landscape. Perhaps it could start by trimming a few CEOs.
After Bob Bakish was unceremoniously (but richly) exited from the company, Paramount went with an “Office of the CEO” setup, the trio of George Cheeks, Chris McCarthy, and Brian Robbins. Those three, with a lead-in from controlling shareholder Shari Redstone, ran Paramount Global’s 2024 Investor Day presentation — and a brief (and very rehearsed) Q&A — on Tuesday.
Redstone’s is the final signature required for Paramount to be merged with Skydance; a formal announcement is likely in the coming days. Until then, mum is the word on that pending deal — and Paramount Global must present to investors like the offer doesn’t exist.
Coincidentally, the three men have a three-part plan to turn around this Titanic (and maybe even tow its pieces back to port).
- Transform streaming: Paramount+ must accelerate its path to profitability to make up for the company’s vast linear-television declines. Last we heard, Paramount expects Paramount+ to be profitable in the U.S. in 2025.
- More layoffs: “We’ll reduce non-content cost by streamlining our organization, allowing us to build a leaner, more nimble company that’s better positioned to win,” Cheeks said.
- Paramount Global must “optimize” its “asset mix,” and then “use the proceeds to pay down debt.”
We’ll tackle each of these, in order.
One fix to streaming could be to reduce churn, or the rate of membership cancellations. It’s high time to find a bundle partner, which (outside of its own Showtime service) Paramount+ has been unable to do. All the other major streamers are teaming up — even Peacock — but Paramount+ (to this point) is left in the lurch.
Perhaps not for long, if McCarthy’s spin is accurate.
“We’ve been very pleased with the significant level of inbound interest that we’ve received from potential partners,” he said, adding that Paramount is “aggressively pursuing all options” and continue to “explore the right partnerships” for Paramount+.
That “inbound” clarifier is a flex to remove any sense of desperation.
McCarthy may be thinking bigger than your average three-streamers-for-the-price-of-two bundle. Don’t be surprised if all that Paramount+ plus Peacock talk heats back up again.
Of course, Paramount+ could be exited from the building entirely if the Skydance deal closes and its billionaire CEO David Ellison is not a fan of the streaming business.
Paramount’s cost-cutting plan, especially the layoffs, aims to create $500 million in annual savings in the near term — and that’s “just the beginning,” Cheeks said.
“We’re prepared to move quickly in the cost reductions,” Cheeks said. “We’re confident that the business can be run much more efficiently by adjusting to the realities of the environment we’re operating in today.”
When reached by IndieWire, a Paramount Global spokesperson declined to elaborate on the coming layoffs.
Should Paramount and Skydance merge, there will be even more job losses — and that office of the CEO is going to get real empty, real fast. Bakish in February announced a cost-cutting plan for Paramount that included the layoffs of 800 staffers.
It won’t just be all these staff reductions that will better balance Paramount Global’s balance sheet. The co-CEOs also said there are savings to be found in Paramount’s real-estate usage, within its marketing budgets, and by leveraging new technologies. If your AI alarm bells began ringing, you are probably on to something.
Finally, paying down debt is a fine action item (just ask David Zaslav), though the throat-clearing for Paramount’s third and final bullet is basic corporate speak that could (and should) apply to any organization. Not inconsequential though: Skydance’s latest offer comes with $1.5 billion in cash to help pay down Paramount’s debt.
