Paramount (PARA) has reportedly cut staff from its national cable networks by 25% and closed its longtime MTV News division after 36 years on the air.
Nine teams will be merged into one, according to Bloomberg, which first reported the news. Employees were notified of the cuts on Tuesday. The company did not respond to Yahoo Finance’s request for comment on the report.
The update comes after the media company cut its dividend and posted disappointing quarterly results last week. Paramount previously unveiled a restructuring plan that combines Showtime with MTV Entertainment Studios. The company, which also announced it would merge its Paramount+ and Showtime streaming services into one product to take on bigger competitors, is eyeing greater integration between its cable TV and streaming offerings amid growing trends. cord cut.
Paramount shares fell 5.9% on Wednesday. Shares rallied slightly to end the day down more than 4%.
“This is a difficult but important strategic realignment of our group,” wrote Chris McCarthy, president of Showtime/MTV Entertainment Studios and Paramount Media Networks, in an internal memo published by The Hollywood Reporter. “Through eliminating some units and streamlining others, we will be able to reduce costs and create a more efficient approach to our business as we move forward.”
McCarthy added that despite the success of series like “Yellowstone,” “Dexter,” “Billions” and “Yellowjackets,” which helped boost Paramount+’s global subscriber count to 60 million, the company “continues[s] feel the pressure of broader economic headwinds like many of our peers. »
The media giant reported a direct-to-consumer loss of $511 million in the first quarter, compared to a loss of $456 million in the year-ago period.
Advertising within the company’s TV media unit fell 11% year-over-year in the first quarter, after falling 7% in the fourth quarter. Management maintained that the second half of the year will see improvements in the advertising market.
Paramount reported quarterly results last week that fell short of revenue and profit expectations as the company continues to battle advertising headwinds and larger losses across its business. streaming division.
Paramount also updated its dividend policy, cutting its quarterly cash dividend to $0.05 per share from $0.24 per share. Shares fall nearly 30% after the announcement.
Warren Buffett, who is a 15.3% shareholder in Paramount, made a direct reference to the cut at Berkshire Hathaway’s annual shareholder meeting on Saturday, telling the crowd: “It’s not good news when a company drastically cuts its dividend.”
Shari Redstone is currently non-executive chairman of Paramount Global, in addition to chairwoman of her family’s holding company, National Amusements, which controls the company through its Class A shares.
Alexandra Channel is a senior reporter at Yahoo Finance. Follow her on Twitter @alliecanal8193 and email her at alexandra.canal@yahoofinance.com
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