Amid falling cable revenue and rising streaming costs, PSKY begins mass layoffs to streamline operations and improve margins—Wall Street remains cautious.
2,000 Jobs Slashed in Major Post-Merger Restructuring
Paramount Skydance (NASDAQ: PSKY) will eliminate approximately 2,000 U.S. jobs starting the week of October 27, marking one of the largest media workforce reductions of the year.
- The cuts are part of a $2 billion cost-saving initiative following the $8.4 billion merger between Skydance Media and Paramount Global, which closed in August.
- Full details of the restructuring are expected with the company’s Q3 earnings report on November 10.
- PSKY shares dipped 0.77%, closing at $16.77, as investors reacted to the news.
The goal: cut traditional TV costs and reorient resources toward streaming and film—two areas that CEO David Ellison and President Jeff Shell see as core to the company’s future.
Targeting Legacy TV Operations, Not Creative Growth
Reports from Variety and Reuters indicate that layoffs will affect multiple divisions, with a particular focus on legacy broadcast and cable units, where revenue continues to decline due to cord-cutting and ad softness.
However, PSKY is still actively investing in marquee content and distribution deals, signaling a dual strategy of cost control and creative expansion:
- A $7.7 billion broadcast rights deal with the UFC
- New creative partnerships with the Duffer Brothers and other high-profile talent
- Ongoing operational audits with Bain & Company to identify additional savings
This mix of retrenchment and reinvestment reflects the broader challenges facing legacy media companies in an increasingly digital-first entertainment landscape.
Ellison and Shell Restructure for Streaming and Film Growth
As the new leadership team settles in, CEO David Ellison and President Jeff Shell are focusing on simplifying operations, enhancing profitability, and consolidating leadership across the newly merged entity.
Their strategy centers on:
- Prioritizing streaming assets and global franchises
- Trimming underperforming legacy divisions
- Potentially pursuing future M&A, including a rumored interest in Warner Bros. Discovery (WBD)
These moves position Paramount Skydance for a leaner and more agile operating model, but the transition won’t be without friction—especially for displaced workers and uncertain shareholders.
Investor Reaction: Mixed Sentiment and Cautious Outlook
Wall Street remains divided on PSKY:
- The stock carries a Hold consensus rating, reflecting uncertainty over execution risk.
- Analysts have set an average price target of $12.69, implying a 24.33% downside from current levels.
The market appears skeptical about whether cost cuts alone can restore long-term growth, particularly amid rising content costs, competitive streaming dynamics, and limited near-term revenue visibility.
A Bold Reset, But Risks Remain
Paramount Skydance’s 2,000 job cuts and $2 billion restructuring effort underscore a broader industry pivot from broadcast to digital-first models. While leadership is moving aggressively to position the company for the future, the road ahead includes execution risks, potential integration challenges, and growing investor pressure to deliver on streaming and content investments.
The Q3 earnings report on November 10 will offer deeper insights into how well the company is balancing cost-cutting with creative ambition—and whether PSKY can convince the Street it’s worth the wait.