Multiple areas in the entertainment giant's business are starting to slip, and it is opting to make a drastic decision to help cut costs over the next few months.
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In Paramount's second-quarter earnings report for 2024, the company revealed that its revenue decreased by 11% year-over-year.
Some factors contributing to the decline include dips in its TV media sector, where revenue slumped by 17% due to declining advertising, licensing, and cable subscription sales.
The company also stated that it took a nearly $6 billion impairment charge for its cable networks division, which is a cost that shows the reduction in the value of an asset.
In addition, Paramount also revealed that it is facing challenges in its film-TV business despite releasing major films such as "A Quiet Place: Day One" and "IF" during the second quarter. Its filmed entertainment revenue shrunk by 18%, which is mainly due to its theatrical revenues declining by 40% and licensing and other revenue decreasing by 9%.
Paramount did, however, see a significant boost in revenue from its streaming service Paramount+, a 46% year-over-year increase. However, it lost 2.8 million subscribers during the quarter.
The company attributed the loss to the end of a partnership deal in South Korea and a loss in consumers who subscribed to Paramount+ for the Super Bowl.
Amid recent setbacks in its business, Paramount revealed that it will move forward with a plan to cut costs.
During an earnings call that discussed Paramount's latest financial report, Paramount Media Networks CEO Chris McCarthy said that the company will shrink its U.S. workforce by 15% after it identified $500 million in annual cost savings.
"We are primarily focused on two areas: first, redundant functions within marketing and communications; second, streamlining our corporate structure, reducing our headcount in finance, legal, technology and other support functions," said McCarthy.
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He said that the layoffs will take place "in the coming weeks" and will mostly cease by the end of the next year.
The last time Paramount laid off a chunk of its employees was in February when it eliminated 800 positions. In May last year, the company also shrunk its headcount by 25%, affecting employees in its cable network division.
Paramount's tough move follows a concerning trend among companies nationwide. According to data from WarnTracker.com, around 143,000 employees across the country have lost their jobs this year.