Times got tougher for staff and Paramount Skydance (PSKY). Variety reported that the company would cut 2,000 jobs the week starting Oct. 27.
The firm has a $2 billion cost-cutting plan. It wants to increase efficiency after it closed the $8.4 billion merger between Paramount Global and Skydance Media in late summer. Investors will get details on the job cuts when the firm posts third-quarter results on November 10.
Rumors continued to float around Paramount Skydance planning to bid for Warner Bros. Discovery (WBD). On Oct. 15, the NY Post reported the bid rumor. WBD stock traded as low as $7.25 in the last year. It peaked at $20.24. This is a price that speculators think WBD stock will fetch on a buyout.
Investors in either firm may need to exercise caution from here. The entertainment industry faces heightened competition from other sources of media. Alphabet’s (GOOG) YouTube competes for its audience. Their streaming services also have a tough time competing against Netflix (NFLX).
Netflix stock is a more attractive alternative. Even though the price-to-earnings ratio of NFLX stock is over 50 times, the company is entrenched in the streaming media sector.
If a PSKY-WBD merger goes through, the combined firm may be too big to navigate the increasingly competitive sector.
