On Wednesday, Paramount announced the commencement of a significant workforce reduction, cutting approximately 1,000 employees. This decision marks the first phase of a broader strategy aimed at restructuring the entertainment company since David Ellison assumed leadership in August. In an early morning email to staff, Ellison emphasized that this much-anticipated move was essential for “building a strong foundation for the future.” The layoffs represent around 5% of Paramount's total workforce.
In his communication, Ellison stated, “Today we begin the difficult process of informing impacted team members across the company.” He acknowledged the challenges of these decisions, particularly considering the contributions of those affected. Sources familiar with the situation, who wish to remain anonymous, reported that the layoffs are being felt throughout various divisions, including CBS, CBS News, and cable channels such as MTV and Comedy Central. Additionally, the historic Melrose Avenue film studio is also experiencing cuts. It is projected that an additional 1,000 jobs will be eliminated in the near future, ultimately reducing Paramount’s workforce by about 10%.
This workforce reduction aligns with the objectives set by Paramount's new owners, Skydance Media and RedBird Capital Partners, who have communicated to investors their intention to cut more than $2 billion in expenses. The recent cuts are seen as a preliminary step toward achieving this financial target. Following the acquisition in August, which included the integration of approximately 1,300 Skydance employees, Paramount’s workforce had surged to nearly 20,000 employees.
Ellison pointed out that the layoffs are part of a strategic initiative to address redundancies and phasing out roles that no longer align with the company’s evolving priorities. He stated, “In some areas, we are addressing redundancies that have emerged across the organization. In others, we are phasing out roles that are no longer aligned with our evolving priorities and the new structure designed to strengthen our focus on growth. Ultimately, these steps are necessary to position Paramount for long-term success.”
Paramount has a history of workforce reductions, having laid off over 800 employees in June, which accounted for approximately 3.5% of its workforce prior to the Ellison-led takeover. At that time, management cited the decline in cable television subscriptions and a shift towards strengthening their streaming TV business as reasons for the cuts. In 2024, the company had already eliminated 2,000 positions, equating to 15% of its staff.
In a related development, longtime CBS News journalist John Dickerson announced his exit from the network, effective December. Dickerson, who has been a prominent figure at CBS for over 15 years, co-anchored the “CBS Evening News” and has been associated with other key programs. His departure is part of a broader trend within the media landscape, as Paramount's layoffs signal ongoing contraction in both the entertainment and tech sectors.
The recent layoffs at Paramount are not isolated; they reflect ongoing challenges within the industry. For instance, Amazon recently announced the elimination of approximately 14,000 corporate jobs to streamline operations and enhance efficiency through artificial intelligence. Other major players, such as Meta, also disclosed job cuts within their divisions, highlighting a widespread trend of workforce reductions across various sectors.
Los Angeles, a hub for film and television production, is experiencing significant changes. As of August, around 112,000 people were employed in the region's motion picture and sound recording industries, a number that remains relatively stable year-over-year but down 27% from the peak levels of 154,000 in 2022, according to the U.S. Bureau of Labor Statistics. The industry is grappling with the aftermath of the 2023 strikes by writers and actors, which led to a pullback in studio spending.
Local film industry officials remain cautiously optimistic about a potential production boost due to California's enhanced film and television tax credits. However, the sector faces ongoing challenges, including shifting consumer habits and competition from platforms like YouTube and TikTok. As Kevin Klowden, an executive director at the Milken Institute Finance, noted, “There’s a real concern about that level of competition and what it means for the financial health of all major operations in Hollywood.”
