US Markets
Tuesday, February 13th, 2024 4:06 pm EDT
Key Points
- Layoffs Following Super Bowl Success: Paramount Global’s announcement of significant layoffs, affecting approximately 800 employees or 3% of its workforce, comes just after CBS achieved record Super Bowl viewership. This juxtaposition suggests that despite a major success for one aspect of the company, there are challenges elsewhere, leading to the need for cost-cutting measures.
- Strategic Adjustments Amid Merger Considerations: The layoffs are framed as part of Paramount Global’s strategic vision for the future, aiming to build on momentum and execute plans for the upcoming year. This move coincides with the company’s exploration of merger and acquisition options, including discussions with Skydance Media and Warner Bros. Discovery. The job cuts may be seen as a step towards operating more efficiently and potentially preparing for changes resulting from any future mergers or acquisitions.
- Financial Challenges for Paramount+ Despite Super Bowl Revenue: Despite the success of Super Bowl 58, which drew record viewership and commanded high advertising rates for CBS, Paramount+ continues to face financial losses. The streaming service lost $238 million in the third quarter alone, indicating ongoing struggles in the streaming market. This financial strain underscores the need for Paramount Global to streamline its operations and cut costs, even in the wake of lucrative events like the Super Bowl.
Paramount Global is undergoing significant layoffs, with Chief Executive Officer Bob Bakish announcing in an internal memo that approximately 800 employees, around 3% of its workforce, will be affected. This decision follows the company’s recent announcement of record Super Bowl viewership on CBS. Bakish stated that these layoffs are intended to support the company’s strategic vision for the future. The news led to a 4% drop in Paramount’s shares during morning trading. Paramount Global, which owns various assets including CBS, Paramount Pictures, Pluto TV, and Paramount+, has been exploring merger and acquisition options, including discussions with Skydance Media and Warner Bros. Discovery. The layoffs were foreshadowed in a January memo, where Bakish emphasized the need for the company to operate more efficiently. Paramount+ has been facing financial losses, with $238 million lost in the third quarter alone, despite the success of Super Bowl 58, which drew a historic 123.4 million viewers and commanded record-high advertising rates, with CBS earning additional revenue due to the game going into overtime. The company’s fourth-quarter earnings are set to be reported on February 28th.
For the full original article on CNBC, please click here: https://www.cnbc.com/2024/02/13/paramount-global-lays-off-about-800-employees-after-super-bowl.html
