Paramount Global announces it will cut 15% of U.S. workforce, shares rise on second-quarter earnings

Paramount
Global
is
cutting
15%
of
its
U.S.
workforce,
or
about
2,000
jobs,
part
of
a
broader
cost-cutting
plan
as
it
prepares
for
a
merger
with
Skydance
Media.

Paramount
has
identified
$500
million
in
cost
savings,
which
include
the
head
count
reductions,
as
part
of
$2
billion
in
synergies
related
to
its
transaction
with
Skydance.
The
job
cuts,
which
will
begin
in
the
coming
weeks
and
largely
conclude
by
year
end,
will
target
the
company’s
marketing
and
communications
department
and
employees
who
work
in
finance,
legal,
technology
and
other
support
functions,
the
company
said
during
its
earnings
conference
call
Thursday.

Paramount
agreed
to
a
merger
with
Skydance
Media

last
month.
That
deal
includes
a
45-day
go-shop
period
—
in
which
a
special
committee
of
Paramount’s
board
could
find
another
buyer
—
that
concludes
later
this
month.

Meanwhile,
earnings
surged
as
the
company’s
streaming
division
swung
to
an
unexpected
profit
—
the
first
time
Paramount
has
announced
a
profitable
quarter
for
its
direct-to-consumer
business.

Shares
climbed
more
than
5%
in
after-hours
trading
Thursday.

Here’s
how
Paramount
performed
in
the
quarter compared
with
what
Wall
Street
was
expecting,
based
on
a
survey
of
analysts
by
LSEG:

• 
  Earnings
  per
  share: 54
  cents
  adjusted
  vs.
  12
  cents
  expected
• 
  Revenue: $6.81
  billion
  vs.
  $7.21
  billion
  expected

Second-quarter
revenue
dropped
11%
and
missed
analyst
estimates
as
licensing,
TV
advertising
and
cable
subscription
sales
dropped.

The
revenue
drop
was
the
largest
miss
compared
to
analyst
estimates
since
February
2020,
according
to
LSEG
data.
Paramount
attributed
the
miss
to
a
decline
in
TV
licensing
revenue,
which
can
be
difficult
for
analysts
to
model
given
their
start
and
end
dates.

Paramount+
revenue
grew
46%
on
year-over-year
subscriber
growth
and
higher
prices.
Paramount+
customers
decreased
2.8
million
from
last
quarter
to
68
million
as
the
company

unwound
a
Korean
partnership
deal
with
entertainment
company
CJ
ENM’s
Tving
streaming
platform.

Paramount’s
streaming
division
turned
a
profit
for
the
quarter
of
$26
million
after
losing
$424
million
a
year
ago.
Analysts
had
estimated
a
loss
of
$265
million
this
quarter.

Paramount
reaffirmed
it’s
on
track
to
reach
U.S.
profitability
for
Paramount+
in
2025.
The
streaming
service
has

raised
prices
and
cut
content
spend.

Paramount’s
quarterly
profit
is
helped
by
not
having
an
NFL
licensing
charge
for
the
period,
which
will
kick
in
later
in
the
year.

Shares
have
slumped
31%
so
far
this
year
amid
declines
among
cable
subscribers
and
a
soft
linear
TV
advertising
market.

Paramount
also
took
a
$6
billion
one-time
impairment
charge
associated
with
the
decline
in
its
cable
networks.
It
comes
on
the
heels
of
a

$9.1
billion
write-down
from
peer


Warner
Bros.
Discovery
on
Wednesday.

The
company
had
to
take
the
charge
as
an
adjustment
forced
by
its
transaction
with
Skydance.