Skydance offers eligible staff a one-time voluntary buyout

Chairman and CEO David Ellison and co-CEO Ynon Kreiz set out the program in a memo to staff on 26 October. Employees who qualify will receive an individual communication with their terms and a window to decide whether to accept the "one-time offer," the executives wrote. The company has not disclosed how many employees qualify, how many it expects to accept, or how many positions it expects to eliminate.

Buyout terms vary by worker

Eligibility criteria and deadlines differ by union status and contract type, Variety reported, citing people familiar with the situation. In general, the opt-in deadlines fall around the second week in November, according to those people. The memo described the program as a way to let eligible employees move on "in a way that works for them."

The cost target and the office rule

Skydance executives have said they aim for more than $6 billion in annualized cost savings within three years, and layoffs will form part of that. Ellison and Kreiz told employees the combined company has nearly $70 billion in revenue, FInchannel reported. The target is roughly 9% of that revenue. Storyboard18 put the combined company's net debt at around $80 billion.

The same memo set a five-day in-office policy across Skydance. The policy will be phased in by location, with employees receiving advance notice before new requirements take effect, American Bazaar reported. Ellison and Kreiz wrote that in-person collaboration is vital to the company's culture and business, and that the best ideas come from people in the same room.

Savings not mainly from labour, executives say

Skydance board member and deal architect Gerry Cardinale has argued that most of the savings would come from non-labour costs, including unifying technology systems across the direct-to-consumer businesses, Storyboard18 reported. Ellison said after the closing that the savings would not primarily come from workforce reductions.

The deal behind the memo

The acquisition closed on 6 October. Storyboard18 put the transaction at about $111 billion including assumed debt, and said Warner Bros. Discovery shareholders received roughly $31 a share in cash before the shares stopped trading on Nasdaq.

Warner Bros. Discovery had earlier agreed to sell its studios and streaming business to Netflix for $27.75 a share, about $82.7 billion, Storyboard18 reported. Paramount Skydance then bid $31 a share for the whole company, including its television networks. The combined group now holds Paramount Pictures, Warner Bros., Paramount+, HBO Max, CBS and CNN.

In a Day One memo on the day the deal closed, Ellison and Kreiz wrote: "Integrating two companies will bring change, including difficult decisions that affect our workforce." They said they were committed to handling the process "thoughtfully and respectfully."

The Los Angeles County estimate

An August report commissioned by the Los Angeles County Department of Economic Opportunity and the LA County Film Office projected that up to 4,500 direct film and television jobs could be lost over three years. It put exposure at 10,360 job-years when indirect and induced employment is included. The report said the figures were not a layoff forecast and that the companies had not announced cuts on that scale.

What happens next

Skydance has not announced the scale or timetable of the layoffs. Ellison told the company's first town hall that integration would require "difficult decisions." "There will be changes, and there will be impacts. I'm not going to pretend otherwise," he said, according to Business Standard, which cited a recording reported by Business Insider.