Skydance targets $6 billion in cost cuts across merged media empire

Skydance has shared its blueprint to cut at least $6 billion in costs over the next three years. The company, created through the combination of Paramount Skydance and Warner Bros. Discovery, is targeting duplicate spending across an expense base exceeding $50 billion.

Where the cuts will come from

The largest share of savings will come from corporate overhead. Skydance expects at least $2.2 billion in reductions by cutting redundant back-office functions, flattening management layers, shrinking its office real estate, and expanding the use of artificial intelligence.

Technology and streaming integrations account for another $1.4 billion in expected savings. The company plans to unify its broadcast architecture, combine back-end systems, and eventually merge Paramount+ and HBO Max into one platform. A streaming bundle will arrive early next year as an initial step. Another $1.4 billion will come from centralizing purchasing and cutting overlapping third-party contracts, while marketing and promotional cuts will make up at least $1 billion.

Content strategy and quarterly performance

Skydance currently spends more than $30 billion each year on films and television series. Leadership plans to re-evaluate how it distributes and monetizes both new projects and its existing catalog. Management also plans to use artificial intelligence tools to accelerate production timelines and lower filmmaking costs.

The media giant faces short-term challenges. It anticipates a $200 million drag in the fourth quarter due to weak theatrical performance from Warner Bros. studio titles. For the third quarter, the legacy Paramount Skydance business reported $7.03 billion in revenue and adjusted earnings before interest, taxes, depreciation, and amortization of $1 billion. These figures do not include the Warner Bros. Discovery transaction, which closed after the quarter ended.

Workforce and office changes

The cost-reduction push follows several workplace shifts. Skydance rolled out voluntary buyout packages for staff ahead of planned layoffs, mandated that workers return to the office five days a week, and parted ways with eight high-ranking executives across the legacy businesses.