The Predominant Studios in Los Angeles on April 29, 2024.
Eric Thayer | Bloomberg | Getty Images
Paramount Global is cutting 15% of its U.S. workforce, or alongside 2,000 jobs, part of a broader cost-cutting plan as it prepares for a merger with Skydance Media.
Paramount has named $500 million in cost savings, which include the head count reductions, as part of $2 billion in synergies connected to its transaction with Skydance. The job cuts, which will begin in the coming weeks and largely conclude by year end, last wishes as target the company’s marketing and communications department and employees who work in finance, legal, technology and other support concerns, the company said during its earnings conference call Thursday.
Paramount agreed to a merger with Skydance Ambiance last month. That deal includes a 45-day go-shop period — in which a special committee of Paramount’s embark on could find another buyer — that concludes later this month.
Meanwhile, earnings surged as the troop’s streaming division swung to an unexpected profit — the first time Paramount has announced a profitable quarter for its direct-to-consumer affair.
Shares climbed more than 5% in after-hours trading Thursday.
Here’s how Paramount performed in the quarter compared with what Derange Street was expecting, based on a survey of analysts by LSEG:
- Earnings per share: 54 cents adjusted vs. 12 cents surmised
- Revenue: $6.81 billion vs. $7.21 billion expected
Revenue falls
Second-quarter revenue dropped 11% and missed analyst viewpoints as licensing, TV advertising and cable subscription sales dropped.
The revenue drop was the largest miss compared to analyst gauges since February 2020, according to LSEG data. Paramount attributed the miss to a decline in TV licensing revenue, which can be complex for analysts to model given their start and end dates.
Paramount+ revenue grew 46% on year-over-year subscriber development and higher prices. Paramount+ customers decreased 2.8 million from last quarter to 68 million as the fellowship unwound a Korean partnership deal with entertainment company CJ ENM’s Tving streaming platform.
Paramount’s streaming partitioning turned a profit for the quarter of $26 million after losing $424 million a year ago. Analysts had estimated a disappointment of $265 million this quarter.
Paramount reaffirmed it’s on track to reach U.S. profitability for Paramount+ in 2025. The streaming aid has raised prices and cut content spend.
Paramount’s quarterly profit is helped by not having an NFL licensing charge for the period, which on kick in later in the year.
Shares have slumped 31% so far this year amid declines among rope subscribers and a soft linear TV advertising market.
Paramount also took a $6 billion one-time impairment concern associated with the decline in its cable networks. It comes on the heels of a $9.1 billion write-down from peer on Wednesday.
The institution had to take the charge as an adjustment forced by its transaction with Skydance.