Paramount Global announces it will cut 15% of U.S. workforce, shares rise on second-quarter earnings

Paramount Global is cutting 15% of its U.S. workforce, part of a broader cost-cutting plan as it prepares for a merger with Skydance Media.

Paramount has identified $500 million in cost savings, which include the head count reductions, as part of $2 billion in synergies related to its transaction with Skydance. The job cuts will affect the company's marketing and communications department, as well as employees who work in finance, legal, technology, and other support functions, the company said during its earnings conference call Thursday.

Paramount agreed to a merger with Skydance Media last month. That deal includes a 45-day go-shop period — in which a special committee of Paramount's board could find another buyer — that concludes later this month.

Earnings surged as the company's streaming division swung to an unexpected profit — the first time Paramount has announced a profitable quarter for its direct-to-consumer business.

Shares climbed more than 5% in after-hours trading Thursday.

Here's how Paramount performed in the quarter compared with what Wall Street was expecting, based on a survey of analysts by LSEG:

Second-quarter revenue dropped 11% and missed analyst estimates as licensing, TV advertising and cable subscription sales dropped.

The revenue drop was the largest miss compared to analyst estimates since February 2020, according to LSEG data. Paramount attributed the miss to a decline in TV licensing revenue, which can be difficult for analysts to model given their start and end dates.

Paramount+ revenue grew 46% on year-over-year subscriber growth and higher prices. Paramount+ customers decreased 2.8 million from last quarter to 68 million as the company unwound a Korean partnership deal with entertainment