Paramount (PARA) is reportedly cutting 25% of staff in its domestic cable networks and shuttering its long-standing MTV News division after 36 years on air.
Nine teams will be merged into one, according to Bloomberg, which first reported the news. Employees were notified of the cuts on Tuesday. The company did not respond to Yahoo Finance's request for comment on the report.
The update comes after the media company cut its dividend and released disappointing quarterly earnings last week. Paramount previously unveiled a restructuring plan that combines Showtime with MTV Entertainment Studios. The company, which also announced it would merge its Paramount+ and Showtime streaming services into one product to take on larger competitors, is eyeing greater integration between its cable television and streaming offerings amid escalating cord-cutting trends.
Paramount shares dropped as much as 5.9% on Wednesday. Shares recovered slightly to close the day down more than 4%.
"This is a tough yet important strategic realignment of our group," Showtime/MTV Entertainment Studios and Paramount Media Networks President Chris McCarthy wrote in an internal memo published by The Hollywood Reporter. "Through the elimination of some units and by streamlining others, we will be able to reduce costs and create a more effective approach to our business as we move forward."
McCarthy added that despite the success of series like "Yellowstone," "Dexter," "Billions," and "Yellowjackets," which helped push Paramount+ global subscribers to 60 million, the company "continue[s] to feel pressure from broader economic headwinds like many of our peers."
The media giant reported a direct-to-consumer loss of $511 million in the first quarter compared with a loss of $456 million in the prior year period.
Advertising within the company's TV media unit fell 11% year-over-year in Q1 after falling 7% in the fourth quarter. Management has maintained the second half of the year will see improvements in the ad market.
Paramount reported quarterly results last week that missed expectations on both the top and bottom lines as the company continues to battle advertising headwinds and greater losses within its streaming division.
Paramount also updated its dividend policy, slashing its quarterly cash dividend to $0.05 per share from $0.24 a share. Shares plummeting nearly 30% following the announcement.
Warren Buffett, who is a 15.3% stakeholder in Paramount, directly referenced the cut during Berkshire Hathaway's annual shareholder meeting on Saturday, telling the crowd, "It’s not good news when any company cuts its dividend dramatically."
Shari Redstone currently serves as the non-executive chairwoman of Paramount Global, in addition to president of her family's holding company, National Amusements, which controls the company through its class A shares.
Alexandra Canal is a Senior Reporter at Yahoo Finance. Follow her on Twitter @alliecanal8193 and email her at [email protected]
Read the latest financial and business news from Yahoo Finance