MTV News shutting down as Paramount moves to cut costs
MTV News is shutting down as Paramount Media Networks moves to slash headcount in an effort to cut costs.
A quarter of employees across Showtime, MTV Entertainment Studios and Paramount Media Networks will lose their jobs as part of parent company Paramount Global's efforts to restructure its cable and entertainment TV unit, according to a memo from Chris McCarthy, who heads Paramount Media Networks, that was shared with CBS News. (Paramount Global, the parent company, also owns CBS News.)
"[W]e have made the very hard but necessary decision to reduce our domestic team by approximately 25%," McCarthy states in the email, calling the move "a tough yet important strategic realignment of our group."
The cuts follow February layoffs at Showtime, where Deadline reported that some staffers were let go as part of a broader integration of the cable network into Paramount+, the company's streaming service.
The memo also highlighted Paramount+ and its "incredible track record of hits including Yellowstone, 1883, Tulsa King, South Park, The Challenge, Teen Wolf, 1923, Drag Race, Mayor of Kingstown, Your Honor, George & Tammy and Yellowjackets," noting that the shows "helped Paramount+ lead the industry in new subscriber growth."
Paramount Media Networks, originally called MTV Networks, operates TV channels including CMT, Comedy Central, MTV, Nickelodeon and TV Land.
Tough media landscape
MTV News, a cultural touchstone after launching in 1985, has shrunk significantly in recent years. It is shutting down at a time of heightened pressure on the media industry, which is grappling with the shift from linear TV networks to streaming and as digital news publishers struggle to stay afloat.
BuzzFeed said in April it would shutter its Pulitzer Prize-winning news unit. Vice News, BuzzFeed's competitor in the upstart online news space for much of the 2010s, is also in trouble, with the New York Times and the New York Post reporting the company is headed for bankruptcy.
Paramount, like many large media companies, is struggling amid an economic downturn that has hit advertising hard and as spending on streaming content remains elevated. The company reported a first-quarter loss of $1.1 billion, compared with a $433 million profit in the year-ago period. Paramount also slashed its dividend in an effort to preserve cash.
Paramount shares are down roughly 3% this year.
"Ultimately, cash remains king and the need to preserve as much as possible given the fundamental challenges facing Paramount led to the dividend cut to save $500 million a year," analysts at MoffettNathanson said in a recent research note.
The full memo from Chris McCarthy follows:
Team,
As we finalize the integration of SHOWTIME and continue to transform our business for the future, we have set a great foundation for continued success by consolidating our group into two functions:
· Studios – integrating SHOWTIME and MTV Entertainment Studios into one powerful studio team
· Networks – combining nine separate teams into one portfolio group
This combination has resulted in an incredible track record of hits including Yellowstone, 1883, Tulsa King, South Park, The Challenge, Teen Wolf, 1923, Drag Race, Mayor of Kingstown, Your Honor, George & Tammy and Yellowjackets – which, taken together, drove record subscribers across Paramount+ and Showtime and helped Paramount+ lead the industry in new subscriber growth.
However, despite this success in streaming, we continue to feel pressure from broader economic headwinds like many of our peers. To address this, our senior leaders in coordination with HR have been working together over the past few months to determine the optimal organization for the current and future needs of our business.
As a result, we have made the very hard but necessary decision to reduce our domestic team by approximately 25%. This is a tough yet important strategic realignment of our group. Through the elimination of some units and by streamlining others, we will be able to reduce costs and create a more effective approach to our business as we move forward. Today we will notify employees whose positions are being impacted with leaders communicating the news directly to those teams/or individuals. These meetings will be followed by individual 1:1s with our HR partners.
I realize these decisions will be very hard for everyone, most of all, those who will be leaving. It's not something we take lightly. We have some of the most passionate and dedicated team members, who bring their full selves to drive our brands and business forward. This is why it's so difficult to say goodbye to our friends and colleagues. To those impacted, we deeply appreciate the passion and creativity you have brought every day. I want to thank you for your many contributions.
Our leadership team and HR partners are committed to ensuring this process is done with empathy and respect.
Sincerely,
Chris