• by Wayne Friedman , Staff Writer, January 24, 2024

Media companies have been making big announcements about major staff reductions at various operations -- even as we are seeing positive economic data and record-breaking stock-market news.

Earlier this week, Paramount Global said it would be starting a new round of layoffs, with as many as 1,000 employees being laid off.

This has been a process for the company over the last year and a half. About a year ago, there were layoffs at Showtime. Then in May, the company started to eliminate 25% of staff in its domestic cable networks. Paramount also stopped its long-running 36-year old MTV News programming in May.

Earlier this year, Walt Disney said its Pixar unit may lose up to 1,300 workers. In 2023, Walt Disney laid off 7,000 employees in a widespread company move.

But the widespread layoffs are not just occurring in legacy media.

More recently, Google has been cutting hundreds of jobs -- across engineering, technology and other areas. Amazon has been reducing staff at its Prime, Twitch and Audible and other entertainment businesses.

Spotify in December said it would cut 17% of its workforce, while social-media company Discord is also cutting 17%. 

These follow a slew of U.S. newspapers making cuts over the past year as well.

The timing of layoffs can be interesting. No doubt, these companies are always feeling the pressure to cut costs, which can give investors a push to buy company shares. 

But the flip side is a strong Wall Street investor marketplace. Is it the best time to make cuts when things are good? Maintaining company employee loyalty can be key.

For legacy media, this is obvious. There are ongoing challenges with streaming/direct-to-consumer (D2C) business costs -- which gets high-profile financial news coverage. Companies need to keep the pressure on when it comes to doing everything to right-size these operations -- on a consistent basis. 

Any way you look at it, company morale takes a major hit when there are layoffs. Although it might be expected for profitable digital-first companies to cut some positions, in good times, companies might be expected to make measured business operational decisions.

For legacy TV-based companies, the situation can be more tenuous. Bigger business moves might be made -- including closing of business or possible mergers.

For example, merger talks were reported between Warner Bros. Discovery and Paramount Global.

And why the layoffs in January? Because making cuts a few weeks earlier in late November and through December -- during the Thanksgiving, Christmas, and New Year's holiday period -- is the absolute worst time of year, and morale would be at its lowest.