The pink slips are flying this week at Walt Disney Co. as the entertainment giant seeks to slash billions of dollars in costs.
CEO Bob Iger confirmed in a staff email Monday that a first round of layoffs has begun. Disney plans to slash 7,000 jobs in three waves, with the first coming this week, the next in April and a final round by the beginning of summer, Iger said in the email. The layoffs are part of Disney’s “cost-saving measures” that will create a “streamlined approach to our business,” he wrote.
Company officials said in a conference call last month that the job cuts, which represents roughly 3% of Disney’s global workforce of 220,000, will save Disney roughly $5.5 billion.
“In tough moments, we must always do what is required to ensure Disney can continue delivering exceptional entertainment to audiences and guests around the world — now, and long into the future,” he wrote.
The past few years have been tough on the House of Mouse. Disney lost billions of dollars in the early years of the pandemic, when it had to close amusement parks and halt in-person productions of movies and TV shows. The parks reopened in April 2021, helping to recoup some of those losses as Disney raised admission prices for the Magic Kingdom, Epcot and Hollywood studios.
The first round of layoffs have centered mostly on Disney’s television production and acquisitions departments, according to the Hollywood Reporter.
More recently, however, Disney’s growth has dragged because of its enormous investment in streaming, including its flagship Disney+ platform. Although the company has quickly become a major player in the fiercely competitive online video business, amassing 235 million paid subscribers across Disney+, Hulu and ESPN+, the high cost of producing content has left its streaming assets deep in the red. The company reported a $1 billion loss in its direct-to-consumer arm during the first quarter of 2023.
Disney competes with Apple, Amazon, Comcast, Netflix, Paramount (the parent company of CBS News) and other streaming services in what is an increasingly crowded market. Iger told employees in November during a town hall meeting that one way to make streaming profitable is to stop chasing subscribers and spending heavily on marketing and instead take “a very, very hard look at our cost structure across our businesses,” Reuters reported.
Disney abruptly fired its former CEO Bob Chapek in November and reinstalled Iger, who previously led the company for 15 years. According to Wall Street analysts at the time, one of Iger’s top priorities for reviving Disney would be to make its streaming platforms profitable. (CBS)