February 18th 2024.
After the highly successful broadcast of Super Bowl LVIII, which broke records as the most-watched program in America since the historic Apollo 11 moon landing, Paramount made a surprising move by laying off about 800 of its employees in the United States. This decision caught the public off guard, as the company had just experienced such a resounding success. Many began to point fingers at Paramount's CEO, Bob Bakish, for the direction he was taking the company. Ben Daves, a former script and production coordinator for Netflix Animation, and a screenwriter for Paramount Animation, publicly criticized Bakish on Twitter, stating that during his time at Paramount, there were massive layoffs every year and the stock price had dropped significantly since Bakish took over.
As reported by The Guardian, although Paramount had seen success with original programming like "Yellowstone," the company had decided to shift its focus to its biggest global hits and less on American television. In an internal memo obtained by the outlet, Bakish thanked the employees for their hard work and acknowledged the difficult situation the layoffs had put them in. He stated, "To those with whom we are parting ways, we are incredibly grateful for your hard work and dedication. Your talents have helped us advance our mission of unleashing the power of content around the world. We are a better company because of you." Bakish also expressed his confidence that the layoffs were necessary for the company's future success and growth, despite the challenges they presented.
While the specific brands and departments affected by the layoffs were not immediately clear, it has now been revealed that employees at CBS News, BET, Nickelodeon, and the Noggin team have been let go as part of Paramount's cost-cutting measures. In addition to the American employees, there will also be more layoffs of global Paramount employees in the future. In December, CNBC reported that rumors of a potential takeover by another company caused Paramount's stock price to increase by 12%. However, when it was reported in January that Byron Allen had made a $30 billion buyout offer for the company, the stock price surged again before settling at $14 a share.
It has been rumored that Shari Redstone, who holds a majority stake in the company, is open to making major deals and was considering bundling Paramount's streaming service, Paramount+, with Apple TV+. There were also reports that Warner Bros. Discovery was in talks to merge with Paramount Global, driven by the company's significant debt. However, Paramount+ has been struggling to compete with other streaming services like Netflix and Disney+, and according to WPTV, it incurred a loss of $1 billion in 2023.
It remains to be seen if the layoffs will effectively solve Paramount's financial challenges. According to the Harvard Business Review, while layoffs may provide short-term relief, they often result in a decrease in employee engagement and long-term profitability, which is often the reason behind companies resorting to layoffs in the first place. In their conclusion, the HBR suggests that instead of automatically turning to layoffs, companies should carefully plan and manage workforce changes to address the ever-changing technological landscape and intense competition.
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