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Paramount (NASDAQ:PARA) layoffs are the talk of Wall Street today on news that the entertainment company will cut hundreds of employees as it transitions away from standard television. Indeed, roughly 3% of the company’s 24,500 employees will be affected by the job cuts, per a New York Times anonymous source.
According to Paramount CEO Bob Bakish, the layoffs come as a cost-saving effort in order to restore growth to the company’s bottom line.
“While I realize these changes are in no way easy, as I said last month, I am confident this is the right decision for our future,” said Bakish. “These adjustments will help enable us to build on our momentum and execute our strategic vision for the year ahead — and I firmly believe we have much to be excited about.”
Despite this, Paramount actually managed to beat both earnings and revenue projections at its September earnings call. The company is due to report fourth-quarter earnings on Feb. 28.
Paramount owns a number of popular entertainment studios spanning both movies and cable television, including the likes of CBS, Paramount Pictures, Nickelodeon and Comedy Central. However, it’s streaming service, Paramount+, has proven a major pitfall for the company. The platform lost more than $230 million in its third quarter.
Paramount had actually warned employees of impending job cuts late last month in an internal memo, as part of Paramount’s goal to “operate as a leaner company and spend less,” according to Bakish.
Paramount Layoffs Weigh on PARA Stock
As you might imagine, Paramount’s job cuts haven’t proven fortuitous for PARA stock so far, with shares currently down more than 3% as of this writing. PARA stock is also down about 10% so far this year, adding to its losses in 2023.
Still, things may be looking up for the company. Indeed, Super Bowl LVIII was the most-watched telecast in U.S. history, bringing in 123.4 million viewers across all platforms. CBS charged an average of $7 million for every 30-second ad spot for the program.
On the date of publication, Shrey Dua did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.