Skydance Lays Out $6 Billion Cost-Cutting Plan Following Massive Entertainment Merger

David Ellison, co-chief executive officer of Skydance Corp., and Ynon Kreiz, co-chief executive officer of Skydance Corp., have begun pulling back the curtain on how the newly minted media giant plans to achieve at least $6 billion in cost savings over the next three years. The strategy was unveiled to the public and company shareholders as part of a comprehensive shareholder letter released Monday, coinciding with the reporting of third-quarter earnings.

The ambitious restructuring effort follows the recently closed, high-profile combination of Paramount Skydance and Warner Bros. Discovery. According to the company, the merger creates a vast operational footprint that requires aggressive streamlining to eliminate structural redundancies and maximize profitability across its newly combined global assets.

"By combining two global streaming services, two film and TV studio groups, two television portfolios, and overlapping corporate functions, we can reduce duplicative spend across an expense base of more than $50 billion," the company wrote in the letter to shareholders.

The newly formed media conglomerate outlined specific financial targets designed to reach the $6 billion threshold. Skydance projects that at least $2.2 billion in cost reductions will stem directly from eliminating redundant back-office and corporate functions. This part of the plan involves cutting management layers, rationalizing the company’s extensive office footprint, and ramping up the internal use of artificial intelligence to optimize operational workflows.

Beyond corporate overhead, Skydance expects to secure at least $1 billion in savings by streamlining its marketing and promotional spending across film, television, and direct-to-consumer platforms. An additional $1.4 billion in savings is slated to come from unifying the company’s disparate streaming businesses and broadcast architecture, alongside a complete integration of back-end technology infrastructure.

The final $1.4 billion in projected savings will be tied to optimizing third-party spending, eliminating overlapping external expenses, and consolidating purchasing decisions under one centralized procurement group. The leadership team expressed strong confidence in executing this strategy without disrupting the core creative output of the combined studio assets.

"We are confident in achieving these savings, drawing on our playbook from Paramount," the company wrote to shareholders. "That program is on track to achieve over $2.7 billion in run-rate efficiencies by the end of 2026."

Elements of this extensive cost-cutting initiative have already begun to take shape across the organization. Last month, Skydance initiated voluntary buyout offers to employees as a preliminary step ahead of official, broader workforce reductions. At the same time, the company instituted a strict five-day-per-week in-office policy for its corporate staff. The structural consolidation also claimed high-profile leadership roles last week, resulting in the departure of eight top distribution executives—evenly split with four coming from Warner Bros. and four from Paramount.

A major focal point of the merger and subsequent restructuring involves the future of the company’s digital streaming platforms. Skydance has previously indicated that it plans to eventually merge the Paramount+ and HBO Max streaming services into a single, unified platform. On Monday, the company took the first official step toward that long-term goal, announcing that it will roll out a bundled offering of the two streaming services early next year, promising consumers an even greater value proposition while testing the operational waters for a full technical integration.

Alongside the strategic roadmap, Skydance reported its third-quarter financial results for the legacy Paramount Skydance entity. The company posted revenue of $7.03 billion, coming in roughly in line with StreetAccount consensus estimates of $7.04 billion. Meanwhile, adjusted earnings before interest, taxes, depreciation, and amortization reached $1 billion, successfully topping StreetAccount estimates of $913.5 million. Adjusted earnings per share were reported at 45 cents, though leadership noted these figures were not immediately comparable to prior StreetAccount EPS estimates due to the transitional nature of the corporate reporting period.

Crucially, these financial results do not yet incorporate the operational and financial impact of the Warner Bros. Discovery acquisition, which officially closed after the conclusion of the third quarter. Skydance detailed the ongoing reorganization of its primary business units—comprising studios, direct-to-consumer, and television—and announced that it will provide comprehensive full-year financial guidance during its fourth-quarter earnings report early next year.

Moving forward, the company intends to shift its financial communication strategy to better align with its long-term strategic vision. Leadership informed shareholders that future guidance will be provided strictly on an annual basis to prioritize long-term value creation over short-term market fluctuations. At the same time, management confirmed that it will continue to issue standard quarterly updates, including relevant forward-looking commentary where applicable, to ensure investors maintain adequate visibility into the near-term progress of the business integration.