Shares of multinational media and entertainment company Paramount (NASDAQ:PARA) fell 4.1% in the afternoon meeting as reports that the company's new merger with Skydance is preparing for a large number of layoffs.
Around November, the new Skydance-led Paramount will cut 2,000 to 3,000 positions around November, as part of a cost-cutting plan after its recent $8.4 billion merger. The move is part of a plan to achieve a cost-efficiency of at least $2 billion. While the cuts will be company-wide, sources say CBS News and local stations are preparing for a particularly significant impact. The company's recent performance has been challenging, with revenue falling 2% per year and earnings per share falling over the past two years. Paramount President Jeff Shell said the process would be a necessary one-time activity to stabilize the company’s future, adding: “We don’t want to be a company that lays off employees every quarter.”
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Paramount's stock is not very volatile, with only 9 moves greater than 5% from last year. In this case, today’s moves suggest that the market thinks the news makes sense, although it may not be something that fundamentally changes its perception of the business.
The previous move we wrote was 20 days ago when the stock fell 6.5% on uncertainty over Needham's suggestion that investors were about to merge with Skydance Media.
The investment firm Needham reiterated its “hold” rating, pointing out that there is a lack of clear evaluation of the company's ownership, leadership and strategy after the merger with Skydance Media. This warning follows Paramount’s mixed results for the second quarter, with revenue missing expectations.
Wells Fargo & Company, in addition to negative sentiment, has lowered its target share price from $12.00 to $10.00. The company's recent financial report highlights revenue from its traditional TV division and potential weaknesses of lost subscribers for Paramount+ streaming services.
Paramount has risen 44.1% to $15.24 per share since the beginning of the year, and since August 2025, it is trading close to its 52-week high of $16.03. Investors bought a $1,000 worth of Paramount’s stock price of $1,000 five years ago, which would be a $546.46 investment.
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