Layoffs Hit Paramount: 110 Positions Eliminated
Headcount reductions will primarily impact finance, human resources, IT, international home media distribution, legal and marketing.
Paramount has laid off 110 employees from a broad swath of the studio including its marketing and legal ranks.
According to a memo sent to all employees Tuesday morning, the headcount reductions will also affect finance, human resources, IT and international home media distribution. The studio would not disclose any names or ranks of employees receiving pink slips.
Today's cuts eclipse massive layoffs at Paramount in December 2008, when the studio slashed 7 percent of its workforce across all divisions. At the time, Paramount wouldn’t confirm the number of employees who were let go, but it was believed to be about 100.
The studio has endured a challenging year at the box office, where its biggest earner -- the Brad Pitt starrer World War Z, which cost more than $190 million -- barely turned a profit despite a $539 million worldwide haul. Among the more high-profile misfires were Michael Bay's Pain and Gain and Hansel & Gretel: Witch Hunters., starring Jeremy Renner and Gemma Arterton.
Paramount's marketing team currently is working on a number of campaigns for films that will be released in the coming months, including awards-season hopeful Nebraska, Jason Reitman's Labor Day, the comedy Anchorman: The Legend Continues and Martin Scorsese's The Wolf of Wall Street. It is unclear how many staffers will be lost within the department.
Shares of Viacom, Paramount’s parent company, rose 1 percent on Tuesday to $84.33, less than $1 shy of a 52-week high.Through the first nine months of Viacom's fiscal year, the conglomerate reported that revenue at its "filmed entertainment" unit dropped 18 percent year-over-year to $3.1 billion. Theatrical was down 9 percent, home entertainment was off 34 percent and TV license fees was down 12 percent. The only subdivision showing growth was "ancillary," up 2 percent. Filmed entertainment also showed an operating loss of $68 million in the first three quarters of its fiscal year, reversing operating income of $12 million during the same frame a year earlier.
COO Frederick Huntsberry said the move was necessary "to manage our business with greater speed and flexibility and fully capitalize on opportunities in the global entertainment market."
The layoffs come on the heels of reports that NBC Digital began laying off 5 percent of its staff earlier today.
The full memo to staff from Huntsberry is below.
As our industry continues to adapt to an increasingly competitive environment, we are always ensuring that Paramount is conducting its business as efficiently and productively as possible. As such we are making important and necessary changes in how we operate across several business functions. Although most employees will not be impacted, these changes will result in organizational realignment in select areas, and the elimination of 110 positions on the lot and in a number of international locations. The headcount reductions will primarily impact Finance, Human Resources, Information Technology, International Home Media Distribution, Legal and Marketing.
Change is always difficult and we never take these steps lightly. We are confident that these changes will allow us to manage our business with greater speed and flexibility and fully capitalize on opportunities in the global entertainment market. We know you all join us in wishing our departing colleagues well.
We have an extraordinary team at Paramount, a strong slate of upcoming films and exciting plans for re-entry into television production. Our legacy of success stretches back more than 100 years, with a deep history of adjusting to our industry’s challenges and realizing its new opportunities – all while creating the world’s most iconic films and entertainment experiences.
Thank you for your continued hard work.
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