Paramount’s proposed takeover of Warner Bros Discovery Inc (NASDAQ: WBD) could lead to significant job losses in Hollywood, according to Netflix co-CEO Greg Peters. In an interview with the Financial Times on Monday, Peters warned that the scale and pricing of the deal may result in “severe” workforce reductions.
“A number of people are going to lose their jobs,” Peters said, just days after Netflix chose not to match Paramount’s improved bid for Warner Bros Discovery. He questioned the financial logic behind the acquisition, suggesting the price being paid does not appear economically justified.
Paramount has highlighted expected cost synergies of around $6 billion as part of the merger. However, Netflix reportedly calculated that as much as $16 billion in cost cuts would be required to make the transaction financially viable, given Warner’s $111 billion valuation. The deal ranks among the largest mergers ever seen in the global media industry.
Investor concerns have intensified since Paramount secured the agreement. Credit rating agency Fitch downgraded Paramount’s bonds to junk status on Monday and placed the company on negative watch. The agency cited worries about increased debt levels linked to the Warner deal.
Other major rating agencies have also raised red flags. Both Moody’s and S&P issued warnings in recent days regarding Paramount’s financial position and the risks associated with the merger.
The Paramount-Warner Bros deal is now under close scrutiny as analysts assess its long-term impact on Hollywood jobs, corporate debt levels, and the broader media sector.
