Paramount Global (NASDAQ:PARA) has announced the closure of its iconic TV studio by the end of the week, marking a significant step in its extensive cost-cutting measures as it prepares for a merger with Skydance Media. In a memo to staff, Paramount TV Studios President Nicole Clemens confirmed the shutdown, citing the ongoing transformation within the industry as a key factor.
The studio has been behind notable series including Netflix’s “Thirteen Reasons Why,” Amazon’s (NASDAQ:AMZN) “Reacher,” and Apple’s (NASDAQ:AAPL) “Defending Jacob.” Despite the closure, Paramount’s stock traded flat following the announcement.
Impact on Staff and Operations
Nicole Clemens will depart from the company due to the studio’s closure. All current series and development projects will be transferred to CBS Studios, as stated in the memo. Paramount’s co-CEO, George Cheeks, clarified that the decision to close the studio was influenced by significant changes in the TV and streaming markets, rather than the studio’s performance.
Last week, Paramount Global reported a more substantial slowdown in its linear TV business than anticipated, coupled with a nearly $6 billion write-down on its cable unit. Additionally, the company revealed plans to lay off 15% of its U.S. workforce, following the elimination of about 800 positions earlier this year. The layoffs began on Tuesday and will proceed in three phases, with 90% expected to be completed by the end of September.
Preparations for Skydance Merger
The restructuring efforts are part of Paramount Global’s strategy to optimize its balance sheet ahead of its merger with Skydance Media, projected to conclude in the third quarter of 2025. Skydance, valued at $4.75 billion post-merger, will infuse $6 billion in cash into Paramount, including $1.5 billion directly aimed at addressing the company’s debt.
Following the merger, Skydance CEO David Ellison will assume the role of chairman and CEO of the combined entity. Former NBCUniversal executive Jeff Shell, who was dismissed from NBCUniversal by parent company Comcast (NASDAQ:CMCSA) due to an “inappropriate relationship,” will serve as president.
The new leadership team has outlined a strategic plan for Paramount Global, which includes $2 billion in cost cuts, with $500 million already in progress. The latest restructuring and layoffs underscore these cost-saving efforts.
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