David Ellison warns employees that layoffs are imminent after the major merger between Skydance and Warner Bros. Discovery ( Warner Bros . Discovery ) is completed.

Paramount and Warner Bros Discovery officially completed this merger deal worth approximately $110 billion on October 6th, and after the transaction, Skydance Corp was established. Ellison serves as the chairman and CEO, while the former CEO of Medtronic (Mattel) Ynon Kreiz takes on the role of co-CEO.

David Ellison claims that layoffs are imminent

In a memorandum sent to employees after the completion of the transaction, Ellison and Kreiz acknowledged that the merger of the two companies would lead to staff reductions. The two executives stated that the integration process would involve "difficult decisions that will affect our workforce," and they pledged to proceed with this process in a prudent and respectful manner.

Skydance hopes to achieve an expected cost savings of over $6 billion through this merger in the coming years. Reuters reports that Kreiz has been appointed as co-CEO, indicating that the company will place greater emphasis on operational efficiency, especially considering that the merged business carries about $80 billion in debt.

At present, the scale and timing of the layoffs have not been disclosed to the public.

However, it is reported that before the transaction was completed, employees of Paramount, Warner Bros, and Discovery were already preparing for possible layoffs. Overlapping company, streaming media, and operational functions were identified as clear areas where the new company could cut costs.

Skydance has now become one of the largest media companies in Hollywood, controlling Warner Bros., Paramount Pictures, HBO, HBO Max, Paramount+, CBS, and CNN, as well as major franchises such as "Harry Potter," "Batman," "Mission: Impossible," and "Star Trek."

Despite the company's efforts to cut costs, Ellison also plans to make aggressive investments in content. The company commits to releasing at least 30 theatrical films each year and expects to make substantial investments in movies, television, and streaming services in order to compete more directly with Netflix, Disney, Amazon, and Apple.

This puts Ellison in a difficult balancing act: while cutting expenses and managing a huge debt burden, it also needs to invest sufficient funds to drive the growth of Skydance's entertainment and streaming media business.

For employees, the most immediate question at the moment is how deep the reorganization will be, and which departments of Paramount and Warner Bros will face the greatest cuts.