Paramount-Warner merger cleared as companies brace for layoffs after state settlement

The merger between Paramount and Warner Bros. Discovery was approved on Monday after the companies reached a settlement with attorneys general from 12 states. Insiders at both firms said the agreement surprised many, noting that the deal did not include major divestitures or specific concessions on television assets.

Paramount CEO David Ellison issued a statement affirming that the company will remain headquartered in California, saying, "Our history is here and this is where our future is being built." The settlement includes a commitment to honor existing collective-bargaining agreements and to fund a $47.5 million workforce development program over five years for employees who may be laid off.

Industry observers expect the merged entity to begin a series of layoffs within the fourth quarter, as the companies move toward finalizing the transaction within two weeks. Executives indicated that the first round of cuts will likely occur before the holiday season, with additional reductions possible later in the year.

California Attorney General Rob Bonta, who announced the consent decree, said the settlement does not constitute a vote of support for the merger. Critics noted the lack of required divestitures and limited focus on television operations in the antitrust lawsuit.

The agreement also contains a separate settlement with the Writers Guild of America that bars layoffs at CBS News for five years, while the broader workforce fund aims to provide training and career development for affected staff.