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Many streaming services have raised their prices quite a bit over the past few years. And instead of Paramount Plus raising prices once again, the parent-company, Paramount Global, decided to layoff about 15% of its US employees. This comes as its streaming division recorded a $26 million profit in the recent quarter, amidst losing 2.8 million subscribers.
These layoffs are expected to affect various departments, including its TV networks, film studios, and corporate offices. Marketing and Paramount Plus are two areas that are expected to be hit hard. Paramount Global is following the recent trend in media to optimize their operations and focus more on its profitable ventures. And this is all due to the increasing competition and changing consumer preferences.
These layoffs are likely due to the merger with Skydance
These layoffs are most likely being done ahead of its merger with Skydance to help trim the fat. Back in June, Skydance and Paramount Global announced that it would be merging. Skydance valued Paramount Global at about $28 billion while spending $8 billion on the merger.
Typically ahead of a merger like this, there’s lots of cuts, as the new owner wants to actually make a profit, instead of continuing to lose money – that’s typically what causes a merger to happen. In fact, Paramount Global had to take a $6 billion write down on its TV networks this past quarter.
Paramount Global, which was formerly ViacomCBS, owns a good number of TV channels. Including CBS, BET, MTV, Nickelodeon, Comedy Central, and many more. It also has a movie studio called Paramount Studios, so it’s a pretty far-reaching company, and these layoffs will really affect a good part of the TV and Movie landscape in the US. However, Paramount Plus is one of the only streaming services to have reached profitability, which is great news. This means that they don’t have to raise prices in order to pay for their content library like many other companies have had to do.