Paramount Television Studios will be closed as part of a broader cost-cutting effort ahead of parent company Paramount Global’s merger with Skydance Media, company executives said.
The entertainment giant’s three co-chief executives announced the closure of the studio, known for producing shows such as “The Offer,” “Reacher” and “13 Reasons Why,” and began major layoffs that will cut 2,000 jobs from Tuesday.
In a memo to employees, Paramount Global co-CEO George Cheeks said the decision to close the studios wasn’t driven by financial performance, but was “a result of significant shifts in the television and streaming markets and the need to streamline our company.”
He said current TV shows and development projects would be transferred to Paramount’s sister production division, CBS Studios, and noted that highly regarded Paramount Studios head Nicole Clemens would be leaving the company as a result.
Her departure follows other big names who have been sidelined by the debt-ridden conglomerate that’s home to CBS, MTV, BET, Nickelodeon, Hollywood movie studios and the Paramount+ streaming service.
Last week, longtime “CBS Evening News” anchor Norah O’Donnell announced she would be leaving the bottom-tier station after the 2024 presidential election.
The network also announced a major overhaul of the format of its evening newscast.
These decisions come after the controversial firing of CBS News president Ingrid Cyprian-Matthews in June.
Paramount executives said Tuesday the cuts will be implemented in three phases and continue through the end of the year.
According to the memo obtained by The Washington Post, 90% of the cuts are expected to be completed by the end of next month.
“As the industry continues to evolve, Paramount is at an inflection point where we must make changes to strengthen our business,” co-CEOs Brian Robbins, Chris McCarthy and Cheeks wrote in the memo.
“We know it will be extremely difficult to say goodbye to teammates who have contributed so much to our success,” they added.
Paramount announced in an earnings call last week that it would lay off 15% of its workforce and write down the value of its cable network by nearly $6 billion.
McCarthy, who heads Showtime/MTV Entertainment Studios and Paramount Media Networks, said on a conference call with analysts that the cuts would be primarily in the company’s marketing and communications divisions, with “rightsizing” taking place in other areas, including legal, finance and other corporate functions.
Executives said the job cuts are expected to save $500 million a year in costs.
The stock has lost nearly a third of its value so far this year.
Paramount shares were down 0.3% to $10.29 on Tuesday.
Last month, Shari Redstone, daughter of the late media mogul Sumner Redstone, agreed to sell a controlling stake in Paramount Global to an investor group led by Skydance founder David Ellison for $8 billion.
The deal has a 45-day “buying period” for better offers, running until August 21st.
A consortium including Skydance, RedBird Capital Partners and Mr. Ellison’s father, Oracle co-founder Larry Ellison, is expected to take control of Paramount Global in the first half of next year.
