With the Skydance merger on the horizon, Paramount Global has recommitted to achieving US$500 million in cost savings and is taking steps—including substantial layoffs—to ensure it reaches that target. 

News of a 15% workforce reduction (affecting roughly 2,000 employees in the US) that’s expected to play out over the next few weeks was revealed during the company’s Q2 2024 earnings call yesterday. Paramount has also reported a second-quarter loss of US$5.3 billion, and it wrote down the value of its cable networks by US$5.98 billion—echoing the massive US$9.1-billion impairment charge that Warner Bros. Discovery reported earlier this week.

The impending layoffs follow a previous round of job cuts in June that hit Paramount’s UK-based kids team hard, including Chris Rose (VP of production & development) and Adam Bailey (director of animation).

“Looking ahead, we will continue to aggressively execute on our strategic plan, which focuses on transforming streaming to accelerate profitability, streamlining our organization—including at least US$500 million in annualized cost savings,” said co-CEOs George Cheeks, Chris McCarthy and Brian Robbins in a joint statement.

Overall, Paramount generated US$6.8 billion in Q2 revenue, which was down by 11% compared to the same period last year. Revenue for the TV segment—which includes Nickelodeon—decreased by 17% year over year to US$4.3 billion.

But there was some good news in the DTC segment, where revenue was up 13% (thanks to price hikes and ad revenue growth from Paramount+ and Pluto TV) to pave the way for US$26 million in profit. Paramount+ received a significant viewership boost from Knuckles, which debuted in April and logged more than four million hours of watch time in its first week. This CG-animated Sonic the Hedgehog spinoff series quickly became the streamer’s most-watched kids & family title ever. However, total platform subscribers were down by 2.8 million to 68 million—primarily due to a bundle agreement ending with CJ ENM in South Korea. 

Theatrical revenue was down 40% over Q2 2023, which was buoyed by a particularly strong box-office performance from Transformers: Rise of the Beasts. In its latest quarter, Paramount Pictures released live-action/animated kids film IF (pictured), which has grossed around US$186 million worldwide since premiering in May. This is a pretty strong showing for an original IP, but less helpful to the bottom line, given that the pic cost US$110 million to make.

Despite the financial hits it sustained in Q2, Paramount reported quarterly earnings of $0.54 per share, beating analysts’ estimates by $0.18 per share.