Skydance's First Internal Memo Warns Staff of Layoffs as Fitch Downgrades the New Media Giant's Debt

Since Paramount Skydance's $110 billion acquisition of Warner Bros. Discovery closed Tuesday, October 6, the newly named Skydance Corp. has wasted no time telling its workforce what comes next: cuts.

The 'Day 1' Memo

Hours after the deal closed, Skydance chairman and CEO David Ellison and co-CEO Ynon Kreiz sent a 1,705-word memo titled "Day 1" to employees around 9:40 a.m. ET Tuesday, according to Times of India, which cited a Variety report.

"Integrating two companies will bring change, including difficult decisions that affect our workforce," the pair wrote, according to the memo obtained by both Times of India and TheWrap. "We are committed to handling this process thoughtfully and respectfully."

TheWrap reported the memo also leaned hard into the positive, name-dropping franchises the combined company now controls, including Harry Potter, Mission: Impossible, The Lord of the Rings, DC, Transformers, Star Trek, Game of Thrones and SpongeBob SquarePants, alongside live sports rights for NFL on CBS, the UFC, UEFA and March Madness.

Front Office Sports reported that duplication between the two companies' corporate structures is extensive, meaning the layoffs will likely extend well beyond the sports division, where TNT Sports chief Luis Silberwasser has already departed and former CBS Sports CEO David Berson has taken over as head of the combined Skydance Sports.

Separately, Skydance's chief product officer, Dane Glasgow, sent his own memo to staff Tuesday, obtained by Business Insider, telling employees that "the leaders who will have the greatest impact here are the ones with a bias for action under ambiguity." Glasgow acknowledged the run-up to the merger had been "challenging" and thanked teams for their "resilience."

Fitch Downgrades the Debt

The layoff warning landed alongside a formal credit action. Fitch Ratings downgraded Skydance's long-term debt to BB from BB+, according to Front Office Sports. "The downgrade reflects materially higher leverage after the acquisition and significant execution and integration risks," Fitch said. "It also reflects uncertainty about the company's ability to achieve its stated synergies, which are material to its deleveraging target. The combined company faces structural pressures on linear revenues, streaming competition, and hit-driven content risk."

Skydance now carries roughly $80 billion in debt, per Front Office Sports, and investors are watching closely for signs the company can bring that number down as it integrates two sprawling media operations.

RedBird Doubles Down

Not every financial backer is pulling back. RedBird Capital Partners invested an additional $4 billion at closing, according to Front Office Sports, bringing its total stake in Skydance to roughly $6 billion. Larry Ellison is also backing the deal financially, alongside LionTree and sovereign wealth funds from Saudi Arabia, Qatar and Abu Dhabi.

"By applying our owner-operator model to Paramount and WBD's unmatched portfolio of iconic franchises, premium original programming, and live sports rights, we can protect that legacy while building for a media landscape that's undergoing transformational change," RedBird managing partner and Skydance board director Gerry Cardinale said, according to Front Office Sports.

A Sports Giant Missing One League

The merger hands Skydance touchpoints in nearly every major pro sport, a breadth of rights Front Office Sports says is rivaled only by ESPN. The notable gap: the NBA. George Cheeks, the former CBS president and CEO, now serves as co-chair and chief content officer of Skydance TV, while Berson runs the sports side.

The Content Question Nobody Has Answered Yet

Conservative commentators have framed the merger as a potential check on what they see as Hollywood's left-leaning content pipeline. David Ellison has been described as "MAGA-adjacent" by Daily Wire, and President Trump has publicly called the Ellisons "friends" and "big supporters." Breitbart's John Nolte argued the merger alone won't change much, writing that he expects entrenched staff to resist reform through "walk-outs, strikes, and coordinated leaks," and that he's placing his hopes instead in AI-driven, user-generated content rather than studio leadership.

That's an opinion, not a reported fact, and nothing in Tuesday's Day 1 memo or Glasgow's product memo addresses programming direction, editorial content or ideology. Both memos focus on culture, speed and workforce integration. Whether the new ownership changes what actually airs on CNN, HBO Max or CBS remains untested and unproven either way.

What's Unresolved

Neither memo specified how many jobs will be cut or on what timeline. Ellison and Kreiz promised to handle the process "thoughtfully and respectfully," but gave no numbers. Investors will be watching Skydance's next disclosures for concrete debt-reduction progress and layoff figures. Wall Street has flagged these two metrics as the real test of whether this $110 billion bet pays off.