As reported by Fast Company, two major players in the media industry, the Walt Disney Company and Paramount Global, have both announced significant workforce reductions last month as part of their efforts to cut costs. Paramount Global revealed on September 24th that it would initiate Phase 2 of its layoffs in the United States, with an estimated "several hundred" employees expected to be affected. The company's co-CEOs, George Cheeks, Chris McCarthy, and Brian Robbins, communicated the decision in a memo obtained by Fast Company, citing the need to adapt to the evolving media landscape and accelerate streaming profitability.
It is anticipated that the Phase 2 layoffs will predominantly impact Paramount's streaming organization, with the company's advertising division having already undergone job cuts. Paramount had previously disclosed that approximately 15% of its U.S. workforce, totaling around 2,000 employees, would be affected by the ongoing layoffs. The company's CEOs indicated that after the most recent round of cuts, 90% of the reductions would be completed, aligning with a broader plan to achieve annual cost savings of half a billion dollars.
Following Paramount's announcement, Disney also confirmed its own round of layoffs, with an estimated 300 staff members in the United States affected. The impacted areas include legal, finance, HR, and communications. A Disney spokesperson explained that the company is continuously evaluating ways to optimize its operations and manage costs more effectively to support creativity and innovation. The spokesperson noted that the ongoing review of corporate-level functions identified opportunities for greater efficiency.
These recent layoffs from both media giants come amidst a broader trend of workforce reductions within the industry, driven in part by the shift to streaming. The proliferation of streaming services, while popular among consumers, has posed profitability challenges for many companies. Additionally, declining viewership of traditional television has led to reduced advertising revenue, further impacting the financial health of media organizations.
The impact of these workforce reductions extends beyond the individuals directly affected, reflecting broader structural shifts within the media industry as companies navigate the evolving media landscape and strive for financial sustainability.
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