Paramount Skydance (PSKY) is reportedly creating a “kill-list” of employees to be laid off in early November, according to reports from The New York Post and Variety. The newly formed company is preparing for a massive round of layoffs, targeting some 2,000 to 3,000 job cuts across various departments following their merger.
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Paramount Global and Skydance Media completed their long-awaited $8.4 billion merger on August 7, with David Ellison taking over as the CEO of the combined company.
How Paramount Skydance Plans to Handle the Layoffs
According to reports, Jeff Shell, President of the combined company, has asked managers at Paramount Pictures, CBS, MTV, and Showtime to start compiling a list of employees who may face termination. This move is in line with actions taken by other traditional media companies in response to shifting viewer preferences and growing competition from streaming platforms and sports networks.
The company could notify employees about the layoffs in late October, with expected cost savings of more than $2 billion. The job cuts are expected to coincide with Paramount Skydance’s first quarterly earnings report. Shell told reporters last week that the company wants to complete the process in “one fell swoop” rather than carrying out layoffs every quarter. Reports indicate that most of the cuts are likely to impact Paramount’s television (TV) networks.
At the same time, Paramount Skydance is investing strategically to strengthen its content portfolio. This includes a recent $7.7 billion deal to acquire exclusive U.S. broadcast rights to the Ultimate Fighting Championship (UFC) for seven years. Prior to the merger, Paramount also struck a new $1.5 billion deal with “South Park” creators Trey Parker and Matt Stone, securing access to all existing episodes and 50 new ones for Paramount+ over the next five seasons.
Is Paramount a Good Stock to Buy Now?
Despite ongoing challenges in the media industry, Paramount’s stock has surged more than 54% year-to-date. On TipRanks, PSKY stock has a Hold consensus rating based on one Buy, 10 Holds, and five Sell ratings. The average Paramount Skydance price target of $11.79 implies 26.3% downside potential from current levels.
