Cutbacks come ahead of merger with Skydance Media.
Paramount Global‘s advertising group conducted a round of layoffs on Tuesday (Sept. 17), which are part of the media conglomerate’s efforts to slash $500 million in annual costs, Variety has confirmed.
Paramount Advertising is the centralized team that manages domestic multiplatform ad sales across CBS, BET, Comedy Central, MTV, Nickelodeon, Paramount+, Pluto TV and other properties.
The number of employees affected by the cuts at Paramount Advertising couldn’t be learned. Paramount last month announced that it will lay off 15% of its U.S. workforce, eliminating 2,000 jobs, ahead of its merger with Skydance Media.
The layoffs were announced in a memo to staff by Paramount Advertising president John Halley. “Today is going to be a difficult day as this process will affect our org and we will be parting ways with talented and valued teammates and friends,” Halley said in the memo. “I want to acknowledge how unsettling this may feel, as this is not the first time our org has shouldered impacts. None of this is easy and no decision was made lightly.”
Halley encouraged his team to work from home today and to “exercise grace and kindness toward one another as we navigate these undoubtedly tough changes”.
Halley oversees the company’s domestic multiplatform sales across its broadcast, cable and streaming platforms including CBS, BET, Comedy Central, MTV, Nickelodeon, Paramount+ and Pluto TV. He was previously COO of Advertising Revenue for Paramount, and took over the top ad job at Paramount after the exit of Jo Ann Ross, the TV industry’s first woman ad-sales chief, earlier this year.
On Paramount’s second quarter 2024 earnings call, Chris McCarthy, one of the company’s current three co-CEOs who heads Showtime/MTV Entertainment Studios and Paramount Media Networks, the company expects to complete the layoffs by the end of 2024. The cuts began on August 13 and 90% are expected to be completed by the end of September.
McCarthy noted that the $500 million in targeted cost reductions is included in the $2 billion of “cost efficiencies” identified by Skydance and its partner, RedBird Capital Partners. The layoffs are primarily targeted in two areas: “redundant functions” within marketing and communications and “streamlining our corporate structure” by reducing headcount in finance, legal, technology and other support functions, according to McCarthy.
“As you can imagine, these are difficult decisions to make. We have incredibly talented people at Paramount, and these actions are not a reflection of their contributions. Rather, they are necessary to transform our organization for the future,” McCarthy said on the call.
Paramount Global expects the Skydance deal to close in the first half of 2025. The transaction involves Skydance and RedBird buying out Shari Redstone’s National Amusements Inc. (Paramount Global’s controlling shareholder). Following the close, Larry Ellison — the Oracle founder who is the father of Skydance CEO David Ellison — will own 77.5% of NAI. Last month, an investment group led by billionaire Edgar Bronfman Jr. entered a last-minute $6 billion offer challenging Skydance’s deal, but Bronfman subsequently dropped the bid.
Even with the $2 billion-plus in annualized cost reductions targeted by Skydance/RedBird for the newly combined company, they claim they will be able to “revitalize” CBS through the takeover. The new ownership group will provide “new resources” that will “substantially strengthen and revitalize the over-the-air television broadcasting services that Paramount provides today” with CBS, the Skydance group said in an FCC application requesting the license transfer of CBS’s 28 owned-and-operated local TV stations.
The layoffs in Paramount’s advertising division were first reported by Deadline.
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Originally published: September 06, 2024.
Original source: Bloomberg (via Yahoo! Finance).
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