“Broader economic headwinds” have forced Paramount Global to cut a quarter of its employees, consolidate its many studios, and kill off MTV News after almost four decades.

This follows a A$755 million EBITDA loss for the first quarter, as the company adjusts to the new world of streaming content.

CEO Bob Bakish said in a call with investors that the company is “navigating a challenging and uncertain macroeconomic environment, and you see the impact of that on our financials, as the combination of peak streaming investment intersects with cyclical ad softness.

“We’re going to focus on driving market-leading streaming growth, while navigating this dynamic macroeconomic environment. And know that the decisions we’re making will position us well for a path of streaming profitability, significant earnings growth and a return to positive cash flow.”

Now the company is folding Showtime and MTV into one team, and combining nine separate network teams into one group that will overlook the entire network operation.

Paramount Global had 24,500 employees companywide at the end of 2022.

Below is CEO Chris McCarthy’s letter to employees announcing the cuts.

Team,

As we finalise the integration of SHOWTIME and continue to transform our business for the future, we have set a great foundation for continued success by consolidating our group into two functions:

Studios – integrating SHOWTIME and MTV Entertainment Studios into one powerful studio team
Networks – combining nine separate teams into one portfolio group

This combination has resulted in an incredible track record of hits including Yellowstone, 1883, Tulsa King, South Park, The Challenge, Teen Wolf, 1923, Drag Race, Mayor of Kingstown, Your Honor, George & Tammy and Yellowjackets – which, taken together, drove record subscribers across Paramount+ and Showtime and helped Paramount+ lead the industry in new subscriber growth.

However, despite this success in streaming, we continue to feel pressure from broader economic headwinds like many of our peers. To address this, our senior leaders in coordination with HR have been working together over the past few months to determine the optimal organization for the current and future needs of our business.

As a result, we have made the very hard but necessary decision to reduce our domestic team by approximately 25%. This is a tough yet important strategic realignment of our group. Through the elimination of some units and by streamlining others, we will be able to reduce costs and create a more effective approach to our business as we move forward. Today we will notify employees whose positions are being impacted with leaders communicating the news directly to those teams/or individuals. These meetings will be followed by individual 1:1s with our HR partners.

I realize these decisions will be very hard for everyone, most of all, those who will be leaving. It’s not something we take lightly. We have some of the most passionate and dedicated team members, who bring their full selves to drive our brands and business forward. This is why it’s so difficult to say goodbye to our friends and colleagues. To those impacted, we deeply appreciate the passion and creativity you have brought every day. I want to thank you for your many contributions.

Our leadership team and HR partners are committed to ensuring this process is done with empathy and respect.

Sincerely,

Chris