Magic stutters as layoffs hit Disney
The Walt Disney Company is restructuring to cut costs, and 7,000 people are going to lose their jobs - 3.6% of Disney's global workforce.
Disney CEO Bob Iger revealed the cost-cutting plans on 9 February after the company's quarterly earnings call revealed a fall in revenue from video channels and increased operating losses, including a drop in advertiser and affiliate revenues.
“We will take a very hard look at the cost of everything we make across television and film,” Iger said, explaining that he is targeting $5.5 billion of cost savings across the company and the layoffs will help achieve this. In another comment, he said that the layoffs will be part of reductions in non-sports content, but did not specify which departments will be hit.
Neither did he elaborate on whether the layoffs will be part of departmental downsizing - collateral damage - or whether he actually expects the savings on the salary budget to be significant against the $5.5 billion figure.
Iger admitted that Disney had overstretched itself in its attempt to move away from traditional TV channels to online video, and said that the restructuring will involve separating the company's operations into three segments: entertainment (covering the loss-making streaming as well as film and television), sports, and entertainment parks.
The layoffs may have been coming for a while, since Iger returned to Disney last November, in fact. He took over from former CEO Bob Chapek after the company reported low profitability, and immediately began to reorganise its operations, leading to immediate rumours about layoffs.
This is the third time Disney will have restructured in the last five years, and the second round of layoffs in three years. In late 2020, the company laid off almost 30,000 workers at its US theme parks after pandemic closures sank its operating income into the red.