Paramount Global (PARA) is the most recent company to join the trend of corporate layoffs. The media conglomerate announced plans to cut 3% of its workforce, approximately 800 employees, in an effort to boost profitability. This round of job cuts comes amid swirling merger and acquisition speculation, as Paramount faces challenges in the streaming space.
Yahoo Finance's Alexandra Canal breaks down the details, monitoring Paramount's year-to-date stock performance in 2024.
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Editor's note: This article was written by Angel Smith
Video transcript
- Well, more layoffs coming this morning, Paramount announcing it will be cutting 800 jobs amounting to about 3% of its global workforce. Aurélio and Allie Canal are following these details. And, of course, Ali this comes amid a lot of uncertainty for the studio with a potential sale of its assets.
ALEXANDRA CANAL: Yeah, the layoffs announcement coming as M&A rumors are really swirling for this company. We've heard reported bids from Byron Allen, Skydance, among even our parent company, Apollo Global. So this is something that's heavily in the background as this company continues to lose money, especially within its streaming division, Paramount saying the job cuts are going to take place today, Tuesday, and will impact about 800 employees translating to roughly 3% of that total workforce.
There was an internal memo from CEO Bob Bakish. He reiterated previous rhetoric that layoffs are necessary in order to return the company to earnings growth and right size costs. He said, quote, "I'm confident this is the right decision for our company, and that these adjustments will enable us to build on our momentum and execute on our strategic vision for the years ahead."
Now shares right now they're down about 4%. They have fallen about 13% since the start of the year. And again, like I was saying, this comes as the company has really struggled with profitability. We saw streaming losses of $230 million in the third quarter. And although losses have narrowed, that's not something investors want to see. We are going to get an update from Paramount at the end of the month when it comes to fourth quarter and full year 2023 earnings results. So that will be something that investors will closely be watching for, especially on the heels of this layoff announcement.
- Allie, there is some positive news for Paramount today, CBS announcing record viewership for the Super Bowl. How much of this can we attribute it to the Swift bump?
ALEXANDRA CANAL: I think you can't help but give a nod to Taylor Swift. Yahoo Finance's Brian Sozzi did get a chance to speak with Paramount CEO Bob Bakish prior to this, and he even spoke about the Taylor Swift effect of sure. If you're a Chiefs fan, if you are one of the broadcast distributors, you are certainly happy to have Taylor Swift in your corner. More than 123 million viewers across the company's platform.
This was led by CBS, and it makes it the most watched telecast in history. And I think it's safe to say whatever Taylor Swift touches seems to turn to gold. A lot of historical nods, I think, are associated with the pop star. So we'll see if we can continue to build on this momentum as we head into NFL season next year.
It's going to certainly be interesting because the NFL has become a very fragmented place when you think about viewership. We just got word that Amazon Prime is going to hold an exclusive NFL playoff game, we saw Peacock hold one this year, we also have Thursday Night Football on Amazon Prime, along with a different broadcast channels, and then of course with Sunday Ticket that is owned by Google's YouTube.
So there's just a lot of places for the consumer that they have to go to if they want to watch an NFL game, but clearly CBS leading the way here, 120 million viewers on that, again, across all the platforms 123.4 million tuning in.
- Yeah, incredible numbers. Maybe it helped that also went into OT, right? Exciting game at the very end there. Allie Canal, as always, thanks so much.