With the news of layoffs and cost-cutting measures this week, Paramount Global, the media giant behind CBS, Paramount Pictures, and Showtime, sent shockwaves through the industry. In order to boost profits, CEO Bob Bakish recognized in a note to staff that the company needed to “operate as a leaner company and spend less”.
“Our priority is to drive earnings growth. And we’ll get there by growing our revenue while closely managing costs — a balance that will require every team, division and brand to be aligned,” Bakish said in a memo to employees.
“Where possible, we’ll look to expand our shared services model as we streamline operations. As it has over the past few years, this does mean we will continue to reduce our workforce globally,” he added.
While the exact number of impacted employees remains unknown, reports suggest significant reductions across various departments and divisions.
Interestingly, the cost-cutting moves coincide with whispers of a potential take-private deal for Paramount. Skydance Media, a production company co-founded by David Ellison, reportedly explored buying out the media giant. While negotiations are said to be preliminary, the prospect of a buyout adds another layer of complexity to the situation.
“Amid all this change, it’s no surprise that Paramount remains a topic of speculation. We’re a storied public company in a closely followed industry,” Bakish said. “But I have always believed the best thing we can do is concentrate on what we can control — execution. Leaning into what’s working, while continually adjusting to current realities.”
The business intends to provide more details on its 2024 strategy when it releases its quarterly earnings at the end of February.
The move by Paramount to reduce expenses is a clear illustration of the difficulties the media sector is facing. Even though layoffs are never easy, the company may need to concentrate on running leaner operations and simplifying its content strategy in order to stay competitive in the changing market. But the effectiveness of this strategy depends on striking a careful balance between decreasing expenses and preserving the talent, originality, and high production values that have long been Paramount’s calling cards.