Update:
Disney is about to start its previously announced layoffs this week.
Note seen by CNN from Disney CEO Bob Iger outlines how the layoffs, which can affect 7,000 jobs, will occur in three separate rounds.
According to the memo, the primary is attributable to start this week. The second wave is due in April and is predicted to be the most important, with several thousand employees laid off. The final of three waves will happen before the beginning of summer.
Original story below:
The mouse goes to wash the home.
That was the message heard loud and clear in Disney CEO Bob Iger’s first earnings report since he got here out of retirement to move the worldwide entertainment company.
In a bombshell call with analysts, Iger announced a serious corporate restructuring that may lead to almost 7,000 layoffs to save lots of $5.5 billion in costs. The layoffs affect roughly 3.6% of Disney’s global workforce.
“While it’s needed to fulfill the challenges we face today, I’m not taking this decision evenly,” Iger said. “I actually have tremendous respect and appreciation for the talent and dedication of our employees around the globe and am aware of the non-public impact of those changes.”
Related: Bob Iger returns as CEO of Disney and Bob Chapek steps down effective immediately
Course correction is payable
The House of Mouse is the newest American company to initiate major job cuts, following within the footsteps of Google, Amazon, Facebook and Zoom.
Iger said Disney desires to reinvigorate its movie and TV business while cutting costs for “non-content” operations similar to marketing, labor and technology.
“We must bring creativity back to the core of the corporate, increase accountability, improve performance and make sure the quality of our content and experiences,” said Iger.
Iger said the corporate would reorganize into three segments: an entertainment unit that features movies, television and streaming, ESPN’s sports unit, and Disney Parks, Experiences and Products.
He stressed that the corporate’s streaming services, including Disney+, ESPN+, and Hulu, would remain its “#1 priority.” However, he added that “we now have no intention of abandoning linear or traditional platforms so long as they will proceed to profit us and our shareholders.”
Wall Street reacts
While Disney employees will not be blissful with the news, Wall Street liked what they heard as Disney shares rose 6% in aftermarket trading. After refueling in 2022, stock prices are up 26 percent this yr.
Iger shared quarterly profit and loss results that were higher than many analysts expected.
Disney’s streaming subscribers fell just 1%, from 164 million to 162 million. But ESPN+ and Hulu subscribers increased by 2%. Disney’s theme parks brought in $2.1 billion, up 36 percent from last yr.
The reorganization marks a latest chapter for Iger, who first became CEO of Disney in 2005 and retired in 2020, only to return in 2022.
