Skydance, the newly formed combination of Paramount Skydance and Warner Bros. Discovery, has detailed how it expects to achieve at least $6 billion in cost savings within three years. In a shareholder letter accompanying its third-quarter earnings, the company said it would reduce duplicative spending across its more than $50 billion expense base by eliminating overlapping corporate functions, rationalizing its office footprint, streamlining marketing spend, unifying streaming platforms and consolidating purchasing decisions.
The savings plan breaks down into four main areas. Skydance projects at least $2.2 billion from removing redundant back-office and corporate functions, cutting management layers and increasing use of artificial intelligence. At least $1 billion is expected from streamlining marketing and promotional spending, while around $1.4 billion will come from unifying streaming businesses and broadcast architecture and integrating back-end technology. A final $1.4 billion is tied to optimizing third-party spend, eliminating overlapping expenses and consolidating purchasing decisions in one centralized group.
The company has already begun cutting costs. Last month it offered voluntary buyouts to employees ahead of formal layoffs and adopted a five-day-per-week in-office policy. Last week eight executives, four from Warner Bros. and four from Paramount, departed.
Skydance said it would take the first step toward merging its Paramount+ and HBO Max streaming services early next year, offering a bundle “at an even greater value.” The company has previously said it plans to eventually merge the services.
The company reported third-quarter revenue of $7.03 billion, roughly in line with StreetAccount estimates of $7.04 billion, and adjusted EBITDA of $1 billion, above the $913.5 million estimate. Those results exclude the Warner Bros. Discovery acquisition, which closed after the quarter. Skydance said it would provide full-year guidance during its fourth-quarter earnings report early next year and annual guidance going forward, while continuing quarterly updates with forward-looking commentary where applicable.
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Skydance's planned cost savings by area (US$ billions)
US$ billion
Figures are minimum projections by Skydance over three years. Source: Skydance shareholder letter via CNBC
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Analysis
Why This Matters
The plan signals the depth of cost-cutting expected from one of the largest media combinations, affecting thousands of employees and the future of two major streaming services.
Investors get a detailed roadmap to the promised synergies of the Paramount Skydance–Warner Bros. Discovery merger; execution will determine whether the deal delivers.
The streaming bundle and eventual merger of Paramount+ and HBO Max will reshape the competitive landscape for direct-to-consumer entertainment.
Background
Skydance was created through the acquisition of Warner Bros. Discovery by Paramount Skydance, a deal that closed after the third quarter of 2026. The combined entity controls major film and television studios, a large cable portfolio and two global streaming platforms.
What to Watch
The timing and pricing of the Paramount+ and HBO Max bundle, expected in early 2027.
The scope of formal layoffs after voluntary buyout offers close.
Whether the $6 billion savings target is met or revised when the company provides its first full-year guidance in early 2027.
12 claims in this story checked against 1 source: 12 supported.
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SupportedSkydance outlined at least $6 billion in planned cost savings.US Top News and Analysis: “Skydance is pulling back the curtain on how it plans to achieve at least $6 billion in cost savings in the next three years.”
SupportedThe combined company expects to achieve at least $6 billion in savings within three years, as described in a shareholder letter accompanying its third-quarter earnings.US Top News and Analysis: “Skydance is pulling back the curtain on how it plans to achieve at least $6 billion in cost savings in the next three years. "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 a letter to shareholders Monday as part of Paramount Skydance's third-quarter earnings release.”
SupportedThe company says it will reduce duplicative spending across an expense base of more than $50 billion.US Top News and Analysis: “we can reduce duplicative spend across an expense base of more than $50 billion”
SupportedAt least $2.2 billion in savings is projected from redundant back-office and corporate functions, management layers and increased AI use.US Top News and Analysis: “Skydance said it projects at least $2.2 billion in cost reductions from eliminating "redundant back-office and corporate functions," including eliminating management layers and ramping the use of artificial intelligence.”
SupportedAt least $1 billion in savings is expected from streamlining marketing and promotional spending.US Top News and Analysis: “Skydance expects at least $1 billion in savings from streamlining marketing and promotional spending.”
SupportedAround $1.4 billion in savings is expected from unifying streaming businesses and broadcast architecture and integrating back-end technology.US Top News and Analysis: “And around $1.4 billion in savings will come from unifying its streaming businesses and broadcast architecture and integrating back-end technology.”
SupportedA further $1.4 billion is tied to optimizing third-party spending, eliminating overlapping expenses and centralizing purchasing decisions.US Top News and Analysis: “A final $1.4 billion in savings will be tied to "optimizing third-party spend," eliminating overlapping expenses, and consolidating purchasing decisions to one centralized group, Skydance said.”
SupportedLast month, Skydance began offering voluntary employee buyouts ahead of official layoffs.US Top News and Analysis: “Last month, Skydance began offering voluntary buyouts to employees ahead of official layoffs.”
SupportedThe company adopted a five-day-per-week in-office policy.US Top News and Analysis: “At the same time, the company adopted a five-day-per-week in-office policy.”
SupportedEight executives departed last week, four from Warner Bros. and four from Paramount.US Top News and Analysis: “Additionally, last week saw the departure of eight executives — four from Warner Bros. and four from Paramount.”
SupportedEarly next year, Skydance will take the first step toward merging Paramount+ and HBO Max by offering a bundle “at an even greater value.”US Top News and Analysis: “On Monday, Skydance said it would take the first step toward that goal early next year, offering a bundle of the streaming services "at an even greater value."”
SupportedThird-quarter revenue was $7.03 billion, roughly in line with the $7.04 billion estimate, and adjusted EBITDA was $1 billion, above the $913.5 million estimate.US Top News and Analysis: “revenue of $7.03 billion, which was roughly in line with StreetAccount estimates of $7.04 billion, and adjusted earnings before interest, taxes, depreciation and amortization of $1 billion, topping StreetAccount estimates of $913.5 million.”