Paramount Global (PARA) announced in a memo to staff Tuesday that it will shut down its storied TV studio by the end of the week — the latest move in a series of aggressive cost cuts the company is taking ahead of its expected merger with Skydance Media.
"Paramount Global has made the difficult decision to close Paramount Television Studios as part of the company's broader restructuring plans," Paramount TV Studios president Nicole Clemens wrote. "This has been a challenging and transformative time for the entire industry, and sadly, our studio is not immune."
Paramount's TV studio has produced top series like Netflix's "Thirteen Reasons Why," Amazon's (AMZN) "Reacher" and Apple's (AAPL) "Defending Jacob." The stock traded flat on the heels of the news.
Clemens will be exiting the company as a result of the shutdown. All current series and development projects will transition to CBS Studios, the company said.
"To be clear, this is not a decision based on how PTVS performed," Paramount co-CEO George Cheeks wrote in a follow-up memo to staff. "This move is the result of significant changes in the TV and streaming marketplace and the need to streamline our company."
Last week, Paramount reported a sharper slowdown than analysts expected in its linear TV business as the company took a nearly $6 billion write-down on the value of its cable unit. At the same time, the media giant announced plans to lay off 15% of its US workforce after eliminating about 800 positions in February.
According to a separate internal memo from the company's CEO trio, the layoffs kicked off on Tuesday and will continue in three phases through the end of the year.
"We expect 90% of these actions to be complete by the end of September," Cheeks, along with co-CEOs Brian Robbins and Chris McCarthy, wrote to staff.
The developments come as the entertainment giant preps its balance sheet for an eventual Skydance takeover, set to be completed in the third quarter of 2025.
Skydance, which will be valued at $4.75 billion following the all-stock deal's completion, said it would inject $6 billion in cash into Paramount, with $1.5 billion going directly into its debt-ridden balance sheet.
Skydance CEO David Ellison will become chairman and CEO of the combined company, while former NBCUniversal executive Jeff Shell, who was ousted last year over what NBC parent Comcast (CMCSA) deemed an "inappropriate relationship" with a female employee, will serve as president.
Last month, the new leadership team laid out their strategic vision for Paramount. This includes $2 billion in cost cuts, with $500 million already underway. The latest round of layoffs and restructuring announcements highlighted these efforts.
Alexandra Canal is a Senior Reporter at Yahoo Finance. Follow her on X @allie_canal, LinkedIn, and email her at alexandra.canal@yahoofinance.com.
Click here for the latest stock market news and in-depth analysis, including events that move stocks
Read the latest financial and business news from Yahoo Finance