Skydance outlines plans for six billion dollars in cost cuts over three years

Skydance plans to reach at least six billion dollars in cost savings over the next three years by combining streaming services, film and TV studio groups, television portfolios, and corporate functions.

Cost Savings Plan

The company projects at least two point two billion dollars in reductions from cutting redundant back-office and corporate functions, removing management layers, using artificial intelligence, and cutting office space. Skydance expects at least one billion dollars in savings from streamlining marketing and promotional spending. Around one point four billion dollars will come from unifying streaming businesses and broadcast architecture and integrating back-end technology. A final one point four billion dollars will be tied to optimizing third-party spend, cutting overlapping expenses, and centralizing purchasing decisions.

Job Cuts and Policy Changes

Some cost-cutting has already started. Last month, Skydance offered voluntary buyouts to employees ahead of official layoffs, and adopted a five-day-per-week in-office policy. Last week, eight executives left the company, with four from Warner Bros. and four from Paramount. Skydance plans to eventually merge the Paramount+ and HBO Max streaming services into a single platform, starting early next year by offering a bundle of the streaming services.

Earnings and Guidance

Co-CEO Ynon Kreiz said the company spends more than thirty billion dollars annually on shows and films and is looking to optimize its content budget. Co-CEO and chairman David Ellison said the company will also use artificial intelligence to speed up production and decrease film costs. The company expects a two hundred million dollar headwind in the fourth quarter from theatrical underperformances at Warner Bros. The updates came alongside third-quarter results for the legacy Paramount Skydance company, which included revenue of seven point zero three billion dollars, roughly matching StreetAccount estimates of seven point zero four billion dollars. Adjusted earnings before interest, taxes, depreciation, and amortization reached one billion dollars, beating StreetAccount estimates of nine hundred thirteen point five million dollars. Adjusted earnings per share were forty-five cents. These results do not include the impact of the Warner Bros. Discovery acquisition, which closed after the third quarter ended.

Context

Large media companies often seek major cost savings and operational changes after mergers by combining overlapping platforms and corporate teams. Merging streaming services and centralizing tech budgets are common strategies used to improve financial performance in the entertainment industry. Companies frequently update shareholders on financial results alongside strategic plans during earnings reports.