Media and entertainment giant Paramount announced that it is writing down the value of its cable-TV networks by $6 billion. The company also confirmed it will lay off 15% of its workforce in the United States, amounting to approximately 2,000 workers, as part of efforts to cut down costs.
Paramount’s decision comes days after Warner Bros Discovery took a non-cash goodwill impairment charge of $9.1 billion after reevaluating its networks segment.
The traditional TV network business is going through tough times as users are moving away from cable TV and switching to streaming. This resulted in declining ratings and led to weaker advertisement revenue for the networks.
Speaking with reporters, Paramount’s CFO Naveen Chopra said that the $6 billion write-down was a result of declining TV business and influenced by a recent merger deal with Skydance.
“We need to reconcile the value of our individual reporting unit with the enterprise value for the entire company that’s implied by the [Skydance] transaction,” Chopra said.
Sharing its quarterly earnings report, Paramount saw a 17% decline in revenue in its television division while its streaming unit, fronted by Paramount+, experienced a 46% jump compared to the same period last year.
Paramount’s shares saw a brief rally of up to 7% in after-market trading on Thursday before returning to largely the same level throughout Friday.