Since the new investor group took over Paramount Skydance Corp. in August, the media company has reported its first financial results and announced an increased target for layoffs and cost-saving measures.
Paramount Skydance, which had previously sought to acquire rival Warner Bros. Discovery Inc., stated in a letter to shareholders that it plans to cut an additional 1,600 jobs and aims to achieve at least $3 billion in cost savings.
In pre-market trading on the 11th, the company's stock rose as much as 5%.
In August, film producer David Ellison merged his Skydance Media with Paramount in an $8 billion deal, forming a new company where he serves as CEO. Under Ellison’s leadership, the company is restructuring through layoffs and accelerating production partnerships, including with the Ultimate Fighting Championship (UFC).
For the third quarter, Paramount reported revenue of $6.7 billion, missing analysts' expectations of $6.87 billion, while adjusted EBITDA stood at $952 million.
The company, which owns CBS, Paramount Pictures, and TV studios, expects next year’s revenue to reach $30 billion, slightly above analysts' forecast of $29.8 billion. Its streaming service, Paramount+, added 1.4 million subscribers, bringing its total to 79.1 million. The platform plans to raise prices in the U.S. early next year.
"We are committed to expanding our subscriber base and adopting a more balanced year-round programming strategy to boost engagement," Ellison said during Monday’s earnings call regarding the company’s streaming business.
In the latest round of layoffs, about a quarter of Paramount’s senior vice presidents and above were affected. For vice presidents and lower-level employees in New York and Los Angeles who are unwilling to comply with the new "five-day in-office workweek" policy effective January next year, the company is offering voluntary severance packages. The shareholder letter revealed that around 600 employees have opted for this package.
The new cost-saving target is $1 billion higher than Paramount’s previous goal. The company also stated that the layoffs would include divesting its TV operations in Argentina and Chile.
The restructuring is expected to be completed by the end of 2027, with associated costs potentially reaching up to $1.3 billion.
"We have taken prudent steps to simplify our corporate structure and enhance operational flexibility," the company said in its shareholder letter.
Management pledged to reinvest most of the cost savings into the business, with plans to allocate an additional $1.5 billion in 2026 toward Paramount+, UFC partnerships, third-party licensing, and expanding its film production slate. Ellison noted on the call that starting in 2026, the company aims to release at least 15 films annually.
Since Ellison took over, Paramount has undergone significant changes. Beyond the UFC deal, he has secured production agreements with creative teams behind Netflix Inc.’s hit shows and appointed controversial news startup The Free Press founder Bari Weiss as editor-in-chief of CBS News.
Amid these developments, Paramount continues to pursue an acquisition of Warner Bros., though multiple bids have been rejected as too low. Other companies, including Netflix and Comcast Corp., have also expressed interest in acquiring all or parts of Warner Bros., which is currently in the process of splitting its streaming/production and cable TV businesses into two separate entities.
Ellison declined to comment on acquisition rumors during the call but emphasized that "there is no must-do deal."
"What we’re really focused on is the trade-off between ‘buy’ and ‘build,’ and we are fully capable of achieving our goals organically," he said.