Paramount Global (PARA) will lay off hundreds of employees following a record-setting Super Bowl that garnered more than 123 million viewers across all company platforms, led by CBS.
The job cuts, which will take place Tuesday, will impact about 800 employees, or roughly 3% of Paramount's workforce, sources familiar with the matter told Yahoo Finance.
In an internal memo to employees, Paramount CEO Bob Bakish reiterated his previous comment that layoffs are necessary in order to return the company to earnings growth. "I am confident this is the right decision for our future," he wrote.
"These adjustments will help enable us to build on our momentum and execute our strategic vision for the year ahead — and I firmly believe we have much to be excited about," Bakish continued.
Shares, which are down about 13% since the start of the year, fell 4% Tuesday following the news.
Bakish warned employees job cuts would be coming in a separate internal memo sent on Jan. 25. At the time, he cited the need for Paramount to "operate as a leaner company and spend less."
The company has been bleeding money, particularly within its streaming business. Although losses have narrowed, Paramount still reported a direct-to-consumer (DTC) loss of $238 million in the third quarter.
For the nine months ended Sept. 30, the company's DTC unit lost about $1.2 billion on an adjusted operating profit basis, while its film division shed $143 million over that same time period.
On the TV side, Paramount saw adjusted operating profits drop 12% annually to $3.6 billion, burdened by a 14% slump in linear ad revenue.
Paramount ended the nine-month period with more than $15.6 billion in long-term debt and about $1.8 billion in cash.
Paramount's layoff announcement comes as M&A rumors swirl. Most recently, media mogul Byron Allen reportedly offered $14.3 billion to buy all of the company's outstanding shares.
Outside of Byron Allen, production studio Skydance Media and investment firm RedBird Capital have also expressed interest in a deal. Private equity firm Apollo Global Management, the parent company of Yahoo Finance, along with competitor Warner Bros. Discovery (WBD) are also rumored as potential buyers.
Last week, Bakish told Yahoo Finance's Brian Sozzi that the company is open to dealmaking.
"In parallel, we are always looking at alternate ways of creating shareholder value, including potentially through transactions," the executive said. "We will have to see if anything happens in that regard."
Paramount will report its fourth quarter and full-year 2023 earnings results on Feb. 28.
Alexandra Canal is a Senior Reporter at Yahoo Finance. Follow her on X @allie_canal, LinkedIn, and email her at alexandra.canal@yahoofinance.com.
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