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A proposed merger between Paramount and Skydance, which CNBC reported was agreed to on Monday, is in limbo pending approval from Paramount's majority shareholder Shari Redstone. But the company said Tuesday it has a plan in place if the deal doesn't go through — and it doesn't look good for employees.
The plan, unveiled at Paramount's annual shareholder meeting on Tuesday, calls for cost cuts of about $500 million and the elimination of “duplicate teams and functions throughout the organization, in real estate, marketing and other overhead categories of the company.”
Related: 'I'm smarter now… but also poorer': Warren Buffett says Berkshire Hathaway sold its entire stake in Paramount at a big loss
After Paramount's former CEO Bob Bakish was fired in April, executives Chris McCarthy, George Cheeks and Brian Robbins temporarily shared the role of the “Office of the CEO.”
“To be clear, $500 million in cost savings is just the beginning,” Cheeks said in the call, according to CNBC.
Robbins also mentioned in the call that the company has been “intensively evaluating various options” with “significant inbound interest” for streaming partnerships with the company's Paramount+ platform, which currently has around 70 million subscribers.
“To be clear, we are not talking about marketing packages here. This is a deep and far-reaching relationship,” he said.
A new streaming partnership could potentially follow the path of other competitors, such as Hulu, which was acquired by Disney in 2019, or HBO Max, which merged with Discovery+ last spring to form the streaming service “Max.”
This year, Paramount laid off an estimated 800 employees just days after Super Bowl LVIII in an effort to “get the company back on track” despite mounting debt.
Last month, Warren Buffett announced during the company's annual shareholder meeting that Berkshire Hathaway had sold all of its shares in Paramount, noting that he lost “quite a bit of money” in the process.
“I think I am smarter today than I was a few years ago, but I also think I am poorer because I acquired the knowledge in this way,” Buffett said of his decision.
Related: Paramount lays off hundreds of employees just days after 'blockbuster' success at Super Bowl LVIII
Paramount reported a strong first quarter of 2024, with revenue up 51% year-over-year on its Paramount+ streaming platform.
Redstone is expected to decide on the merger within the next week.
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