The cuts are expected to be made in several departments including marketing and finance
Paramount Pictures has announced it will be eliminating 110 positions on its lot and internationally, slicing 5% of its workforce of 2,200.
Paramount COO Frederick Huntsberry said in a memo to employees that the cuts represented an organizational realignment in select areas and the departments that will be most affected by these cuts will be primarily in the finance, human resources, information technology, international home media distribution, legal and marketing departments.
Paramount is having a bounce back year after having hardly any major successes in 2012. “Star Trek Into Darkness,” “G.I. Joe: Retaliation” and “World War Z” have all grossed more than $350 million worldwide.
“As our industry continues to adapt to an increasingly competitive environment, we are always ensuring that Paramount is conducting its business as efficiently and productively as possible,” Huntsberry said.
“Change is always difficult and we never take these steps lightly,” he added. “We are confident that these changes will allow us to manage our business with greater speed and flexibility and fully capitalize on opportunities in the global entertainment market.”
The layoffs are not a major surprise in light of recent statements by Philipp Dauman, CEO of studio parent Viacom, stressing the need to keep expenses down.
On Sept. 24, Dauman told investors at the Goldman Sachs Communacopia Conference that Paramount would focus on “low risk” films, even on high-budget franchises such as Transformers and Mission: Impossible. He also said that the risk on the sequel to “World War Z” would be alleviated by bringing in co-financing.
“We have a history even in tough times of maintaining or growing margins,” he also said.
Dauman added that doing so requires “a tight lid on expenses, including in programming.”
In May, Dauman sounded similar themes at the Nomura U.S. Media & Telecom Summit, saying that Paramount would “focus on profitability” by integrating with other Viacom businesses.
“For the most part we’re going to greenlight films with consumer products potential,” he said, citing plans to reboot the “Teenage Mutant Ninja Turtles” franchise.
It’s the second time in two years that Paramount has sliced more than 100 slots from studio staff. In October, 2011, Paramount cut about 120 staff positions as part of a consolidation effort in the face of declining DVD revenue as it merged its DVD, television and digital divisions and moved headquarters of its international operation to Los Angeles from London.