Disney layoffs continue this week: eliminating 7,000 roles

Update:

The second round of Disney layoffs (and reportedly the largest) is set to begin this week, with thousands of workers expected to be laid off Monday through Thursday. The cuts will affect employees “from coast to coast”. Disney said.

A memo As seen by CNN Disney CEO Bob Iger outlined how the layoffs, which will affect 7,000 roles, will take place in three separate rounds. The cuts are expected to affect ESPN, Disney Parks and other divisions this week.

The final of three waves is expected this summer.

Original story below:

The mouse is going to clean the house.

That message was heard loud and clear Disney CEO Bob Iger’s The first earnings report since he came out of retirement as head of the global entertainment company.

In a bombshell call with analysts, Iger announced a sweeping corporate restructuring that will result in about 7,000 layoffs. Retrenchment to save $5.5 billion in costs. The job cuts make up about 3.6% of Disney’s global workforce.

“While this is necessary to address the challenges we face today, I do not take this decision lightly,” Iger said. “I have great respect and admiration for the talent and dedication of our employees around the world, and I am mindful of the personal impact of these changes.”

Related: Bob Iger returned as Disney CEO and Bob Chapek stepped down effective immediately

Course corrections come at a cost

House of Mouse is the latest US company to make massive job cuts Google, AmazonFacebook, and Zoom in.

Iger said Disney wants to revitalize its film and TV business while cutting costs in “non-material” operations such as marketing, labor and technology.

“We must return creativity to the core of the company, increase accountability, improve results and ensure the quality of our content and experiences,” Iger said.

Iger said the company will reorganize into three divisions: an entertainment unit that includes film, TV and streaming, a sports-focused ESPN unit, and Disney Parks, Experiences and Products.

He emphasized that the company’s streaming services, which include Disney+, ESPN+ and Hulu, will remain his “#1 priority.” But he added that “we are not going to abandon linear or traditional platforms while they can still be beneficial to us and our shareholders.”

Wall Street reacts

While Disney employees may not have been happy with the news, Wall Street liked what they heard, as Disney shares rose 6% in after-market trading. After tanking in 2022, the stock price is up 26 percent this year.

Iger shared quarterly P&L numbers that were better than many analysts expected.

Disney’s streaming subscribers fell just 1% from 164 million to 162 million. But ESPN+ and Hulu subscribers grew by 2%. Disney’s theme parks posted a profit of $2.1 billion, up 36 percent from last year.

The move marks a new chapter for Iger, who first became Disney CEO in 2005 and retired in 2020, only Return in 2022.