We knew the layoffs were coming at media giant Paramount (PARA), but what we did not know was just how far they would go. Now, we have early reports about where it’s going, and the news is downright frightening. An entire studio has been lost, and it is a studio that might have been considered bulletproof. Investors just barely took the news well, as shares were down fractionally in Tuesday afternoon’s trading.
This might be the biggest hit of all, as Paramount Television Studios—the studio that created Amazon (AMZN) Prime Video’s Reacher, as well as programs from A Gentleman in Moscow to Station Eleven—is officially shuttered. The original plans called for layoffs and other cost-cutting measures that would save a cumulative total of $500 million.
But reports note that Skydance is eager to build on those cuts and see the total amount saved quadruple, ultimately hitting $2 billion. There is some hope here for those who enjoyed Paramount Television Studios shows; the currently existing projects will become part of CBS Studios instead. In fact, some of the staff—though it is not known how many—may ultimately find new work there.
An Inflection Point
It is not easy to let go of employees, but the company noted that it has reached “an inflection point” as “…changes must be made to strengthen our business.” In addition, Paramount declared that it was “…incredibly hard…” to “…part ways with teammates whose contributions have been instrumental to our success.”
The good news here, if it can be called such, is that the cuts are likely to be completed before October dawns. So, anyone who can hang onto their job until spooky season hits is likely to be able to keep it for the foreseeable future.
Is Paramount a Good Stock to Buy Now?
Turning to Wall Street, analysts have a Moderate Sell consensus rating on PARA stock based on three Buys, seven Holds, and 10 Sells assigned in the past three months, as indicated by the graphic below. After a 29.75% loss in its share price over the past year, the average PARA price target of $12.07 per share implies 16.84% upside potential.
