Paramount Global anticipates incurring a $1 billion expense in the present quarter owing to continuous adjustments in programming and the staff reductions previously disclosed this month.
In a statement made during the company’s fourth quarter earnings conference call with financial analysts, CFO Naveen Chopra announced plans for significant changes to the global workforce and content strategy.
These actions are driven by strategic decisions aimed at evolving the business model and enhancing prospective value.
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Consequently, the company anticipates incurring a charge for programming and restructuring in Q1, estimated at approximately $1 billion.
Chopra highlighted the company’s emphasis on “optimizing and sharing” programming between streaming and linear TV platforms.
Additionally, there is a concerted effort to leverage the combined strength of Paramount Global to realize synergies across the organization.
This approach facilitates reductions in headcount costs, as exemplified by the recent announcement made earlier this month.
Paramount Global Slashes Jobs, Targets $200M Savings
On February 13, the company announced the elimination of approximately 750 domestic positions, constituting around 5% of its domestic workforce.
According to Chopra, this decision is projected to yield approximately $200 million in annual run rate cost savings, with the majority of the savings directed towards the TV Media division and general corporate expenses.
He emphasized the ongoing optimization of compensation expenses throughout 2024.
In the fourth quarter, Paramount Global reported mixed results, with revenue falling short of Wall Street expectations due to advertising weaknesses and the repercussions of the Hollywood strikes.
However, one positive aspect was the company’s announcement of its anticipation to achieve profitability in its domestic streaming business by 2025.
Investors have been exerting pressure on Paramount shares, primarily due to concerns regarding streaming losses and a lack of clarity on when profitability may be attained.