The Film division of TV network giant Viacom Inc. (VIAB - Free Report) – Paramount Pictures – has decided to trim 110 employees or 5% of its staff strength in order to economize and remain competitive.
Presently, Paramount has 2,200 employees and plans to slash its workforce across most of its divisions which include finance, human resources, information technology, international home-media distribution, legal and marketing.
Paramount Pictures holds the sixth position in the market with $718 million revenues or 8.9% market share while Time Warner Inc.’s Warner Bros. and Comcast Corp.’s (CMCSA - Free Report) Universal studio are leading with 16.6% and 15.8% market share, respectively.
In 2011, Paramount had topped the box office with $1.86 billion revenues or 18.86% market share. This was mainly attributable to the success of the movie franchise "Transformers: Dark of the Moon" that earned a whopping $ 1.1 billion worldwide.
In the third quarter of 2013, Global Theatrical revenues jumped 64% year over year, on top grossers like “Star Trek Into Darkness” and “World War Z.” Apart from the third quarter, Paramount performed poorly during the last two quarters and l is also expected to face stiff competition from “The Hobbit” and Lions Gate Entertainment Corp.’s “The Hunger Games.”
However, we believe that the fourth movie of the Transformer series, to be released next year, will counter the current lull in its movie business and help the company to regain its market share.
Currently, Viacom has a Zacks Rank #3 (Hold).