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The cuts keep coming.
Chris McCarthy’s swath of Paramount Global is laying off 25 percent of its domestic team today. The reduction comes on the heels of integrating Showtime into his cable and streaming purview, which will be consolidated into two functions going forward. There are “studios,” which now combine Showtime with MTV Entertainment Studios, and “networks,” which will merge nine separate teams into one portfolio group. The majority of the cuts are being felt by the latter group, with certain units, including MTV News, being shut down altogether. Paramount Global had 24,500 employees companywide as of the end of 2022.
“This combination has resulted in an incredible track record of hits,” noted McCarthy in a memo to staff, before rattling off successes like Yellowstone, The Challenge, Your Honor, George & Tammy and Yellowjackets. “However, despite this success in streaming, we continue to feel pressure from broader economic headwinds like many of our peers.”
While the scale might be staggering, another round of layoffs was all but inevitable, given both the degree of consolidation and the broader health of the marketplace. The cuts come roughly half a year after Showtime’s longtime leader David Nevins was shown the door, with other top execs, including Showtime president Jana Winograde, following earlier this year. McCarthy has been busy reimagining the Showtime brand in their absence, increasingly focused on three buckets of programming: diverse cultures, antiheroes, and high-stakes worlds. The projects that don’t fit squarely into those buckets have been shelved and, wherever possible, sold elsewhere. As McCarthy sees it, it’s a way to provide clarity and, as he recently told The Hollywood Reporter, “a way higher hit ratio.”
More recently, parent company Paramount Global posted dismal quarterly earnings, citing such factors as an 11 percent drop in TV ad revenue. CEO Bob Bakish said in a call with investors that the company is “navigating a challenging and uncertain macroeconomic environment, and you see the impact of that on our financials, as the combination of peak streaming investment intersects with cyclical ad softness.”
To be sure, Paramount is hardly alone in its bloodletting. Warner Bros. Discovery, for instance, completed a series of layoffs as well as a corporate reorganization last year, while Disney is in the midst of cutting 7,000 positions across the company.
Here is McCarthy’s full memo to staff:
As we finalize the integration of SHOWTIME and continue to transform our business for the future, we have set a great foundation for continued success by consolidating our group into two functions:
- Studios – integrating SHOWTIME and MTV Entertainment Studios into one powerful studio team
- Networks – combining nine separate teams into one portfolio group
This combination has resulted in an incredible track record of hits including Yellowstone, 1883, Tulsa King, South Park, The Challenge, Teen Wolf, 1923, Drag Race, Mayor of Kingstown, Your Honor, George & Tammy and Yellowjackets – which, taken together, drove record subscribers across Paramount+ and Showtime and helped Paramount+ lead the industry in new subscriber growth.
However, despite this success in streaming, we continue to feel pressure from broader economic headwinds like many of our peers. To address this, our senior leaders in coordination with HR have been working together over the past few months to determine the optimal organization for the current and future needs of our business.
As a result, we have made the very hard but necessary decision to reduce our domestic team by approximately 25%. This is a tough yet important strategic realignment of our group. Through the elimination of some units and by streamlining others, we will be able to reduce costs and create a more effective approach to our business as we move forward. Today we will notify employees whose positions are being impacted with leaders communicating the news directly to those teams/or individuals. These meetings will be followed by individual 1:1s with our HR partners.
I realize these decisions will be very hard for everyone, most of all, those who will be leaving. It’s not something we take lightly. We have some of the most passionate and dedicated team members, who bring their full selves to drive our brands and business forward. This is why it’s so difficult to say goodbye to our friends and colleagues. To those impacted, we deeply appreciate the passion and creativity you have brought every day. I want to thank you for your many contributions.
Our leadership team and HR partners are committed to ensuring this process is done with empathy and respect.
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