Like Clockwork, Paramount/CBS Cuts 18% Of Workforce After Skydance Merger
Last month we noted how the brunchlords in charge of Paramount (CBS) decided toeliminate decades of MTV News journalismand Comedy Central history as part of their ongoing and utterly mindless cost saving" efforts. It was just the latest casualties in an ever-consolidating and very broken U.S. media business routinely run by some of the least competent people imaginable.
We've noted how with streaming subscriber growth slowing, quarterly returns have stagnated. So media giants (and the incompetent brunchlords who usuallyfail upward into positions of unearned power within them) have turned their attention to all the usual tricks: layoffs,pointless megamergers, price hikes, and more and moreweird and costly consumer restrictions.
That of course includes Paramount, recently announced a major merger with Redbird/Skydance. As usual, executives promised that the resulting union would be transformative for the company:
It's a new Paramount; it's not just a catchphrase," said RedBird's Jeff Shell, former CEO of NBCUniversal, on a call with investors Monday. We think it's going to be a new day for these combined assets."
In reality, this kind of consolidation serves no real world function outside of temporarily goosing stock valuations, nabbing a few tax cuts, and flimsily justifying outsized compensation for major media executives. The AT&T, Time Warner, and Discovery mergers did a particularly stellar job demonstrating the chaotic pointlessness of this we're completely out of ideas so let's consolidate" mindset.
Much of the headaches are due to the decline of the traditional TV business, which wouldn't have been quite so painful if executives had adapted to the streaming transition earlier and more smoothly (remember they all wasted the better part of a decade insisting that cord cutting was a fad that would stop once Millennials started procreating).
Wall Street's insatiable need for endlessly improved quarterly returns at impossible scale means these companies can't just make a quality, affordable product that people like. So instead their only solution is to grow larger and larger - while making more and more cuts that sacrifice employees, product quality, customer service, and consumer satisfaction.
The folks that make all the terrible decisions that wind up running these companies into the ground (like Warner Bros Discovery CEO David Zaslav) almost never see real accountability. Instead all the costs of their incompetence are borne by either consumers in the form of higher prices (to pay off merger debt) and lower quality product, or by lower level employees in the form of reduced pay or benefits, and layoffs.
It took less than a week for Paramount's three current and still-employed CEOs (CBS CEO George Cheeks, Paramount Pictures/Nickelodeon CEO Brian Robbins, and Showtime/MTV CEO Chris McCarthy) to announce they would be axing about eighteen percent of the company's workforce. For, you know, synergies:
The entertainment conglomerate behindParamount Picturesis to cut about 2,000 jobs in a bid to reduce costs ahead of amerger with the independent film studio Skydance."
Again, the promise here is that this results in a better, leaner company, but when it comes to media deals like this, that's rarely the case. There's hardly a single major media merger in the last twenty years that genuinely improved the fortunes of employees or consumers.
It's a pointless doom loop that's infected both entertainment media and traditional journalism. By the time any sort of check comes due for executive incompetence, they've either retired on the back of outsized compensation, or are off to another company to repeat the entire process all over again, having been financially disincentivized from learning absolutely anything from the experience.