Paramount Global (PARA) announced in a memo to employees Tuesday that it will close its storied TV studio at the end of the week, the latest step in a series of aggressive cost-cutting moves the company is making ahead of its expected merger with Skydance Media.
“Paramount Global has made the difficult decision to close Paramount Television Studios as part of the company’s broader restructuring plans,” wrote Nicole Clemens, president of Paramount TV Studios. “This has been a challenging and transformative time for the entire industry, and unfortunately, our studio is not immune.”
The Paramount TV studio has produced hit series such as Netflix’s “Thirteen Reasons Why,” Amazon’s (AMZN) “Reacher” and Apple’s (AAPL) “Defending Jacob.” Shares fell shortly after the news.
Clemens will leave the company as a result of the closure. All current series and development projects will move to CBS Studios, the company said.
“To be clear, this is not a decision based on how PTVS performed,” Paramount co-CEO George Cheeks wrote in a follow-up memo to employees. “This move is the result of significant changes in the TV and streaming marketplace and the need to streamline our business.”
Last week, Paramount reported a sharper-than-analysts-expected slowdown in its linear TV business, as the company took a nearly $6 billion write-down on the value of its cable unit. At the same time, the media giant announced plans to lay off 15% of its U.S. workforce after cutting about 800 positions in February.
The layoffs began Tuesday and will continue in three phases through the end of the year, according to a separate internal memo from the company’s three CEOs.
“We expect 90% of these actions to be completed by the end of September,” Cheeks and co-CEOs Brian Robbins and Chris McCarthy wrote to staff.
The developments come as the entertainment giant assesses its position for a potential acquisition of Skydance, which is expected to close in the third quarter of 2025.
Skydance, which will be valued at $4.75 billion after the all-stock deal closes, said it would pump $6 billion in cash into Paramount, $1.5 billion of which would go directly to pay off the company’s debt.
Skydance CEO David Ellison will become chairman and CEO of the combined company, while former NBCUniversal executive Jeff Shell, who was fired last year over what NBC parent company Comcast (CMCSA) called an “inappropriate relationship” with a female employee, will serve as president.
Last month, the new leadership team unveiled their strategic vision for Paramount. This includes $2 billion in cost savings, $500 million of which is already underway. The latest round of layoffs and restructuring announcements underscored these efforts.
Alexandra Canal is a Senior Reporter at Yahoo Finance. Follow her on X @allie_canal, LinkedIn, and send her an email at alexandra.canal@yahoofinance.com.
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