Employees of Paramount Global have been through the wringer since late 2023. But despite the Paramount and Skydance Media’s $8 billion merger to form Paramount Skydance Corp this July, the uncertainty hanging over their heads is far from over. With UFC also being a part of this association now, after signing the seven-year, $7.7 billion deal, the current decisions may only be bad news for the partnership.

According to Variety, Paramount Skydance is set to lay off approximately 1,000 employees this week, primarily in the United States, with most of the cuts expected to take place on Wednesday, October 29. However, this won’t mark the end of layoffs with additional job reductions at a later stage.

Reportedly, after the Skydance deal with Paramount and Shari Redstone’s National Amusements Inc. was announced in July 2024, Jeff Shell, former NBCUniversal CEO and now President of Paramount Skydance, along with consulting firm Bain & Co., had identified at least $2 billion in potential annualized cost savings.

The company wants to implement swift cost cuts and layoffs ahead of the company’s Q3 2025 earnings report to be shared with investors in November. The media giant, led by Chairman and CEO David Ellison, is carrying out a series of major staffing cuts projected to eliminate around 2,000 positions in the United States alone. Further layoffs are anticipated across the company’s international offices as part of a broader restructuring effort.

As of now, Paramount Skydance has not released an official statement regarding the job cuts.

However, a report from The New York Post on August 22 indicated that Paramount Skydance was preparing for a major round of layoffs.  During this time, the newly merged company signed one of the largest sports media rights agreements in recent years with the UFC, led by Dana White, to broadcast events on Paramount+ and CBS.

That’s where Ellison’s $7.7 billion UFC gamble comes into play.

Forbes reported the company had an operating loss of $5.27 billion in 2024. Considering this fact, it was always a question as to how Paramount plans to recoup the value for the $1.1 billion per year it will pay on average to the UFC.

“On a standalone basis we struggle to see how Paramount earns back their investment,” MoffettNathanson analyst Robert Fishman wrote in a research note in August. “However, this deal does cement Paramount’s willingness to once again invest serious capital into the business in an effort to scale long-term.”

While the company hasn’t disclosed a specific reason for the downsizing, competitors such as Netflix, Apple, and Amazon dominating the streaming market can be the pulse of this decision.

In an attempt to revitalize its creative slate, Paramount Skydance has also recruited the Duffer Brothers, the creators of Stranger Things, from Netflix under a four-year deal to develop original films and series, among other steps.

This move is part of a much larger strategy aimed at re-establishing Paramount Skydance as a market leader in entertainment, one of which involves Warner Bros. Discovery. 

Paramount doesn’t plan on dissecting Warner Bros. after the merger

Paramount Skydance has no intention of dismantling Warner Bros. Discovery if its much-discussed merger goes through. According to a report by Bloomberg, Ellison aims to preserve the core creative teams at both studios. Instead, they will be focusing on streamlining marketing and distribution to enhance efficiency. The plan envisions integrating Warner Bros.’ HBO Max streaming service into Paramount+, creating a unified platform under the combined company.

Bloomberg reported that no decisions have been made regarding the sale of real estate assets, and there are currently no plans to sell or spin off cable networks. Paramount’s CBS News may collaborate with Warner Bros.’ CNN, while Ellison looks to harness AI and emerging technologies to ramp up production to 30 films annually. Regardless, last week’s reports revealed that Warner Bros.’ board rejected a nearly $60 billion offer from Paramount Skydance from its $20-per-share deal.

It seems the UFC is starting a new chapter with Paramount+, but meanwhile, many at Paramount Skydance are losing their jobs. While the $7.7 billion UFC deal isn’t directly to blame, it does show where the company’s priorities lie: investing big in sports while cutting costs elsewhere. What do you think of this move?