Skydance announced a comprehensive cost-reduction strategy targeting at least $6 billion in savings over the next three years, detailing how the company plans to extract efficiencies from combining two streaming services, studio operations, and corporate infrastructure. The combined entity identified specific areas where overlapping functions and duplicative spending could be eliminated across an expense base exceeding $50 billion.
The company projected $2.2 billion in savings from reducing redundant back-office and corporate functions, which includes eliminating management layers, increasing artificial intelligence usage, and optimizing office space. An additional $1 billion is expected from streamlining marketing and promotional activities. Skydance identified another $1.4 billion in potential savings through unified streaming operations and integrated technology platforms, while a final $1.4 billion would come from optimizing third-party vendor spending and centralizing purchasing decisions.
Skydance indicated it has already begun implementing cost-cutting measures, including offering voluntary employee buyouts and establishing a five-day in-office work requirement. The company also experienced executive departures, with eight leaders departing from the combined organization. Regarding streaming, Skydance plans to introduce a bundle offering its Paramount+ and HBO Max services early next year, with a full merger of the platforms to follow. The company is also exploring ways to optimize its substantial content budget, which exceeds $30 billion annually, and plans to leverage artificial intelligence technology to reduce film production costs and accelerate timelines.
The announcement accompanied third-quarter earnings results for the legacy Paramount Skydance entity, which reported revenue of $7.03 billion and adjusted EBITDA of $1 billion. The company cautioned investors of a $200 million headwind expected in the fourth quarter from theatrical underperformances. Skydance stated it would provide full-year guidance for the combined entity during its fourth-quarter earnings report early next year, shifting to annual guidance while maintaining quarterly updates.
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