Skydance outlines its $6 billion in planned cost savings. Here's the breakdown

• Skydance has said it plans to cut $6 billion in costs over the next three years.
• On Monday, it outlined where those savings would come from, including marketing spend and the consolidation of streaming and broadcast operations.
• The updates came alongside a third-quarter earnings report for the legacy Paramount Skydance.

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Follow your favorite stocksCREATE FREE ACCOUNTDavid Ellison, co-chief executive officer of Skydance Corp., left, and Ynon Kreiz, co-chief executive officer of Skydance Corp., right, at the New York Stock Exchange, Oct. 8, 2026.Michael Nagle | Bloomberg | Getty Images

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.

Skydance, the newly formed combination of Paramount Skydance and Warner Bros. Discovery, 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. Those savings also account for "rationalizing" its office footprint.

Skydance expects at least $1 billion in savings from streamlining marketing and promotional spending. And around $1.4 billion in savings will come from unifying its streaming businesses and broadcast architecture and integrating back-end technology.

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.

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

Some of that cost-cutting has already begun.

Last month, Skydance began offering voluntary buyouts to employees ahead of official layoffs. At the same time, the company adopted a five-day-per-week in-office policy. Additionally, last week saw the departure of eight executives — four from Warner Bros. and four from Paramount.

The company has previously said it plans to eventually merge the Paramount+ and HBO Max streaming services into a single platform.

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."

Co-CEO Ynon Kreiz told investors during the company's earnings call that Skydance is also looking for ways to optimize its content budget. The company spends more than $30 billion annually on shows and films.

"As one company, we can make smarter choices about how we distribute and monetize both new content and library content," Kreiz said.

Skydance noted that it's expecting a $200 million headwind in the fourth quarter from theatrical underperformances at Warner Bros. studio related to already launched titles and upcoming releases.

The company will also utilize AI to speed up production and decrease costs to make films, co-CEO and chairman David Ellison said on the call.

"We think these tools will help unlock more original storytelling by being able to make the budget more digestible to be able to take that amount of risk," Ellison said.

The updates came alongside third-quarter results for the legacy Paramount Skydance company that included 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.

However, adjusted earnings per share of 45 cents were not immediately comparable to StreetAccount EPS estimates.

The results don't include the impact of the Warner Bros. Discovery acquisition, which closed after the end of the third quarter.

Skydance detailed business units of the combined entity including studios, direct-to-consumer and TV, and said it will provide full-year guidance during its fourth-quarter earnings report early next year.

"Going forward, we will provide guidance on an annual basis, as we prioritize long-term value creation, which we believe will be more consistent with our strategic approach," the company told shareholders. "We will continue to provide quarterly updates, including certain forward-looking commentary where applicable, which will give investors visibility into our near-term progress of the business."

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