In a significant shakeup within the entertainment industry, Paramount Global has commenced the process of laying off employees following its announcement last week to cut 15% of its US-based workforce, resulting in around 2,000 job losses. As part of this restructuring, Paramount Television Studios, known for producing popular shows such as Tom Clancy's Jack Ryan and Reacher, is being closed down.
According to an internal memo shared with Bloomberg, the company's three co-CEOs conveyed to employees on Tuesday that the layoffs would be carried out in three phases over the course of this year, with an estimated 90% of the workforce reductions anticipated to be completed by the end of September. The executives emphasized the need for these changes, citing the evolving nature of the industry and the necessity for Paramount to fortify its business operations.
Paramount has a rich history in television, with the acquisition of Desilu Productions, founded by the legendary Desi Arnaz and Lucille Ball, dating back several decades. Following Viacom's split in 2005, Paramount Television became a part of CBS. The brand was revitalized in 2013, producing a range of shows for platforms like Apple TV+ and Amazon Prime. As part of the current restructuring, all ongoing projects and shows will be transitioned to CBS Studios, the existing production arm of the company.
During the second-quarter financial reporting last week, co-CEO Chris McCarthy mentioned that the layoffs would impact departments such as marketing and finance. Additionally, Paramount incurred a $5.98 billion impairment charge in the second quarter on its cable networks, underscoring the challenges faced by the traditional TV industry in the current landscape. This series of strategic moves signals Paramount's efforts to adapt to the evolving market dynamics and position itself for future growth and sustainability.