Paramount Global co-CEOs have hired bankers to evaluate asset sales and tell employees they have identified areas for job cuts

Paramount Global's trio of co-CEOs provided an update Tuesday at a town hall for the company's more than 20,000 employees on the current status of their plan to cut costs, increase revenue and reduce debt after canceling a possible merger with Skydance.

The three executives – George Cheeks, chairman and CEO of CBS; Chris McCarthy, president and CEO of Showtime/MTV Entertainment Studios and Paramount Media Networks; and Brian Robbins, chairman and CEO of Paramount Pictures and Nickelodeon – were named co-CEOs following the firing of Bob Bakish in late April.

More Variety

At the June 25 town hall meeting, which opened at 10 a.m. at the Paramount Theater on the studio lot in Los Angeles, executives addressed a major area of ​​concern among the rank and file: layoffs and other measures aiming to reach $500 million in annualized revenue. costs, which the trio presented at the June 4 annual shareholder meeting. According to the co-CEOs, since then they have made progress in eliminating duplicate job functions, with work well underway in corporate functions like legal and corporate marketing, according to sources. Variety.

In their prepared remarks, however, the executives did not discuss when mass layoffs could affect the entire company or the extent of the budget cuts. During the question-and-answer portion of the town hall, the co-CEOs were asked if they had a timetable for job cuts, but did not provide one.

As the trio of executives previously revealed, Cheeks said that Paramount executives are “considering selling certain assets owned by Paramount” and added: “in fact, we have already hired bankers to help us with that process – and we will use the proceeds to help pay down debt and strengthen our balance sheet. He didn't specify which Paramount Global assets might be on the block, but those could include BET Media, the creators' trade show division VidCon and the Paramount Pictures lot.

The story continues

The public meeting was originally scheduled for June 5, but the co-CEOs postponed it until June 25, citing “ongoing speculation regarding possible mergers and acquisitions.” On June 11, Shari Redstone, majority shareholder of Paramount Global, ended discussions about merging the company with David Ellison's Skydance Media.

What Went Wrong: Inside Paramount's Failed Merger Talks and the Battle to Save the Company

At this point, Redstone may still be looking to sell its stake in National Amusements Inc., which owns 77% of Paramount's voting stock. Parties that have come forward to express interest in a deal for NAI include former Warner Music and Seagram boss Edgar Bronfman Jr., as well as Bain Capital and producer and filmmaker Steven Paul.

At the start of the town hall meeting, Robbins spoke about ongoing discussions about mergers and acquisitions. “We would like to take a moment to acknowledge the challenges posed by all the M&A speculation surrounding our business. We know what a difficult and disruptive time this has been,” Robbins said. “And while we can't say the noise will go away, we are here today to present a plan for the future that can set us up for success, whatever path the company chooses to take.”

The co-CEOs discussed the fact that Paramount's overall revenue grew 13% between 2018 and 2023, while adjusted operating profit declined 61% during that period. “Let me be clear…a 61% drop in profits is simply unacceptable,” McCarthy told employees. “We must act now to reverse this trend. »

Another key pillar of the three executives' strategy is increasing the profitability of its Paramount+ streaming business to offset linear declines. McCarthy told his staff that on the international stage, “we are advancing negotiations with potential partners who will significantly transform the scale and economics of the service, making it profitable and generating long-term value.” This approach could also serve as a model in the United States. »

At the June 4 shareholder meeting, Cheeks, Robbins and McCarthy outlined their strategy to go it alone. The expected job cuts will result in a “leaner and more agile” company, Cheeks said, adding that the layoffs will target “duplicate teams and functions in the organization, real estate, marketing and other categories of general expenses of the company”.

Tuesday's town hall at the Paramount Theater drew a crowd of some 500 employees, with several thousand more watching via livestream. The co-CEOs spoke for about an hour, including a question-and-answer session in which they took questions from staff following their prepared remarks.

The best of variety

Sign up for the Variety newsletter. For the latest news, follow us on Facebook, Twitter and Instagram.