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Paramount announces layoffs
Paramount said its streaming service Paramount+ posted a $26 million profit in the 2nd quarter of this year after losing $424 million during the same period last year. It expects subscriber growth in the second half of the year.
Paramount has begun laying off a significant portion of its workforce, with hundreds of employees expected to be cut in the coming weeks.
PREVIOUS COVERAGE: Paramount plans to cut thousands of U.S. jobs: 'These are difficult decisions to make'
A memo signed by co-CEOs Chris McCarthy, Brian Robbins, and George Cheeks was leaked to entertainment outlets on Tuesday, including Deadline, in which the chief executives braced employees for the cuts.
"This process will take place in three phases, starting today and continuing through the end of the year," the memo reads. "We expect 90% of these actions to be complete by the end of September."
"We know that having to part ways with teammates whose contributions have been instrumental to our success is incredibly hard. In partnership with our HR leaders, we are committed to providing support to employees transitioning on from Paramount and to our teams who will need to adapt to these changes."
The media company disclosed its plans for the layoffs as it released its second-quarter financial results earlier this month.
"The industry continues to evolve, and Paramount is at an inflection point where changes must be made to strengthen our business. And while these actions are often difficult, we are confident in our direction forward."
"We understand that you may have questions about next steps, and while we may not be able to provide all the answers at this time, we will continue to update you on our progress."
Paramount Global linked the upcoming headcount reduction to a "strategic plan" that involves streamlining its organization.
In addition to streamlining its organization, Paramount Global has identified transforming its direct-to-consumer streaming business and optimizing its asset mix as key parts of its strategic plan.
During the earnings call, the company said it will see a roughly $300-$400 million restructuring charge in the third-quarter in connection to the job cuts.
The "cash impact" of the cuts "will occur over the next several quarters," according to CFO Naveen Chopra.
Paramount Global generated $6.81 billion in total revenue during the second quarter, down 11% year over year.
Paramount Global did not respond to Fox Business's request for comment.
Fox Business's Aislinn Murphy contributed to this report.
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