Paramount Skydance expects another $1B in merger savings as David Ellison resets spending

Paramount Skydance said on Monday it expects $1 billion more in merger savings than it previously forecast as it outlines CEO David Ellison’s ambitions for the company.

The update came in Paramount’s third-quarter earnings report — the company’s first since its merger closed in early August. Ellison has been investing heavily in streaming and content, including live sports rights, and paying for it in part with cuts to other parts of the business.

Paramount on Monday announced a new round of layoffs, affecting roughly 1,600 employees, tied to divestitures of assets in Argentina and Chile. Those cuts come weeks after Paramount began the process to lay off approximately 1,000 employees.

At the same time, Paramount said it plans to increase prices for its flagship streaming service, Paramount+, in the first quarter of next year as it looks to beef up its content slate and improve its the technology of the platform.

Paramount last raised its streaming prices in June 2024, after a previous hike in early 2023.

Shares of the company were up about 6% in extended trading Monday.

In Monday’s letter to shareholders, Ellison mapped out the combined company’s initiatives, which he referred to as Paramount Skydance’s “North Star priorities.” Those include investing in its growth businesses, growing its streaming business globally and savings that would lead to “long-term free cash flow generation.”

While Paramount Skydance management told investors in August they planned $2 billion in cost savings, that was upped to “at least $3 billion in run-rate efficiencies” as of Monday’s report. More than $1.4 billion of those savings will be done by the end of the year and an additional $1 billion by the end of 2026, according to the letter.

The company has been shedding staff. Less than a month after the merger was completed, the company alerted employees that it would be mandating a five-day work week beginning in January and would offer employees a buyout if they didn’t want to make the transition. According to Monday’s letter, about 600 employees chose to exit the company rather than return full-time in January.

The company also identified parts of its South American business to cut and said Monday it divested Television Federal, the operator of TV stations in Buenos Aires and other markets in Argentina. It’s also in the process of exiting Chilevision in Chile, which is expected to be completed in the first quarter of 2026.

These divestitures, which were deemed “non-core” to the company’s future growth, according to the letter, would result in the 1,600 workforce reductions.

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