Approximately 600 Paramount employees chose to walk away from their jobs rather than comply with the company’s five-day return-to-office mandate, according to regulatory filings released on Monday. The voluntary severance packages cost the entertainment giant a staggering $185 million (£140 million), underscoring the scale of the internal shake-up.
The Ultimatum
In September, following the $8 billion merger (£6 billion) between Paramount and Skydance Media, CEO David Ellison issued a companywide email requiring employees to return to working in-person five days a week or accept a buyout. The mandate specifically targeted employees in the company’s Los Angeles and New York offices at the vice-president level and below, with Phase 1 of the rollout scheduled to begin in January 2026.
‘As I said during our town hall, some of the most formative moments of my life happened in rooms where I was a fly on the wall, listening and learning’, Ellison said in the September letter. ‘I’ve never seen that happen on Zoom’.
The policy represented one of the strictest return-to-office requirements in Hollywood, matching tech companies rather than traditional entertainment studios. Employees had until 15 September to decide whether to take the severance package if they were ‘unable or unwilling to return to the office full time’.
A Strategy for ‘Back-Door Layoffs’?
Workplace experts suggest Paramount’s RTO mandate may have served a dual purpose as workforce reduction disguised as workplace policy. A 2024 BambooHR survey of more than 1,500 US managers found that 25 per cent of C-suite executives hoped for voluntary employee turnover as a result of implementing RTO policies, whilst 20 per cent of human resources professionals admitted their RTO mandates were intentionally meant to reduce headcount.
‘Employers have been using the RTO push as a strategy for back-door layoffs, where firms expect and hope workers will quit as a result of in-person work mandates’, Fortune reported.
More Job Cuts Ahead
The 600 voluntary departures represent just the beginning of Paramount’s workforce reductions. The company announced in late October that it had laid off approximately 1,000 employees, with another 1,000 layoffs expected to follow. In total, the cuts will reduce about 10 per cent of the company’s staff.
Additionally, Paramount disclosed it expects another 1,600 staff reductions after divesting Televisión Federal in Argentina and Chilevision in Chile, which the company expects to complete in the first quarter of 2026.
Restructuring Costs Mount
According to a shareholder letter released Monday, Paramount expects to incur $1.7 billion (£1.3 billion) in restructuring expenses. The company has also increased its post-merger cost-savings target from $2 billion (£1.5 billion) to at least $3 billion (£2.3 billion), with approximately two-thirds of the cost reductions attributed to non-labour costs.
The company stated it will make ‘targeted one-time investments’ of approximately $800 million (£607 million) in 2026 and between $400 million (£304 million) and $500 million (£380 million) in 2027 to achieve efficiencies, whilst simultaneously planning incremental programming investments exceeding $1.5 billion (£1.1 billion) in 2026.
Industry Trend
Paramount’s harsh mandate reflects a broader industry shift. NBCUniversal similarly issued employees an ultimatum to return to office four days a week beginning in January 2026 or accept a severance package, signalling that the entertainment industry’s post-pandemic remote work flexibility may be ending permanently.
Originally published on IBTimes UK
