Zinger Key Points
- Paramount Global begins a major workforce reduction, cutting 15% of its U.S. staff, around 2,000 jobs, by year-end.
- The company plans to save $500M annually and streamline operations as part of its strategic shift to boost profitability.
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Paramount Global PARA shares are trading slightly lower on Tuesday.
The company reportedly started slashing its employee base today after it said last week that it intended to cut 15% of its U.S.-based workers, amounting to roughly 2,000 jobs, reported Bloomberg.
In an internal memo viewed by Bloomberg, the company’s three co-chief executive officers told staff that Paramount would conduct the layoffs in three steps.
Bloomberg added, citing an internal company memo, that 90% of the layoffs are projected to be completed by the end of September.
“The industry continues to evolve, and Paramount is at an inflection point where changes must be made to strengthen our business,” the co-CEOs said in the memo.
In its recently reported second quarter results, the company’s co-CEOs said, “Looking ahead, we will continue to aggressively execute on our Strategic Plan which focuses on transforming streaming to accelerate profitability, streamlining our organization — including at least $500 million in annualized cost savings — and improving the balance sheet by growing free cash flow,”
Paramount’s Global Stock Prediction for 2024
When buying a stock for a longer time horizon, it is important for investors to assess where they think the stock is headed.
When mapping a stock's future trajectory, investors should consider factors including the future earnings expectations and expected performance against a benchmark.
Paramount Global’s revenue has grown at an average rate of 11.2% annually over the past five years. The average one-year price target from analysts is $13.29, representing an expected 29.28% upside in 2025.
While past performance does not guarantee future results, investors should also look at a stock's historical performance when compared to a benchmark index and the company's peers.
Shares of Paramount Global have seen an annualized return of -34.05%, underperforming the S&P500 index by 40.2%. This compares to -3.06% growth in the overall Communication Services sector. Paramount Global has a beta of 1.17.
Price Action: PARA shares are trading lower by 0.58% to $10.26 at last check Tuesday.
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