About 240 people will lose their jobs in the wake of Paramount Pictures' acquisition of DreamWorks SKG, Paramount confirmed Wednesday.
Half of the cuts will come at Viacom Inc.-owned Paramount, which employs 2,000 worldwide, while DreamWorks will cut 120 from its staff of 515.
Paramount handed out pink slips to 25 mid-level executives Wednesday in its marketing, finance, international, human resources and computer systems divisions.
A second round of layoffs, affecting about 95 workers, is expected next week, primarily in domestic distribution.
The layoffs at the two companies come on the heels of deep industry cuts rippling through Hollywood as studios try to adjust to slowing DVD sales, a lethargic box office and pressure from investors to boost earnings.
Warner Bros. recently laid off 400 staffers in an effort to slash overhead and shore up its profit. Metro-Goldwyn-Mayer Inc. cut its workforce from nearly 1,500 to about 200 after it was sold to an investment group that included Sony Corp. and Comcast Corp.
At Paramount, the cuts are a byproduct of overlaps created by the studio's $1.6-billion acquisition of DreamWorks.
Paramount also confirmed that it was revamping its management ranks and said it was putting its home entertainment president, Tom Lesinski, in charge of a newly created Digital Media Group.
Kelley Avery, former head of DreamWorks' worldwide home entertainment, is taking the same post at Paramount. Another DreamWorks alum, distribution chief Jim Tharpe, will succeed Wayne Lewellen, who left the studio in December after more than 30 years.
Also moving over from DreamWorks is Hal Richardson, who joins Paramount as president of worldwide television. Richardson will combine his DreamWorks team with Paramount's international and domestic pay TV groups to create one organization.
In a separate management shift that becomes effective in January 2007, Andrew Cripps will become president of Paramount's new international theatrical distribution division. Since 1999, Cripps has served as head of United International Pictures, the overseas distribution venture that Paramount and Universal are dissolving.
DreamWorks co-founders Steven Spielberg and David Geffen will remain in their respective roles as director-producer and chairman. Each has a three-year contract with Paramount.
As part of its agreement in December to acquire DreamWorks, Paramount also forged a seven-year deal with publicly traded DreamWorks Animation SKG Inc., headed by Jeffrey Katzenberg, to distribute its movies.
To help offset the cost of the acquisition, Paramount has been in talks to sell off DreamWorks' 59-title live-action library, which includes such Oscar-winning films as "Gladiator" and "American Beauty."
The studio had been in exclusive negotiations with a private equity group headed by billionaire George Soros, but those talks ended this week. A Paramount official said that Soros was still a potential bidder.