Disney to Lay off 7,000 Employees amidst plan to Cut Over $5 Billion in Costs
Disney has announced that they will be cutting over $5 billion in costs and will be laying off 7,000 employees, according to their quarterly earnings call with investors on Wednesday.
Disney CEO Bob Iger, who was reinstated at the end of last year, has expressed that the financial cuts to the company are a response to the recent underperformance of the company as a whole. He also announced that Disney will be restructuring their organization into three categories: entertainment, sports (ESPN), and parks/resorts.
In the first quarter of 2023, Disney increased their revenue by 8%, a successful turnaround from the company’s financial struggles in 2022. However, many investors seem to be weary about the direction of the company. This has prompted Iger to make these significant financial cuts to their workforce.
According to Iger,
“After a solid first quarter, we are embarking on a significant transformation, one that will maximize the potential of our world-class creative teams and our unparalleled brands and franchises. We believe the work we are doing to reshape our company around creativity, while reducing expenses, will lead to sustained growth and profitability for our streaming business, better position us to weather future disruption and global economic challenges, and deliver value for our shareholders.”
Disney CEO Bob Iger
The company’s streaming service, while one of the top-used streaming services in the world, lost 2.4 million subscribers in the last quarter of 2022. This was their first decline in subscribers since Disney Plus was first launched. Amidst these recent struggles, there is speculation that Iger is open to selling the streaming service Hulu (which is still owned by Disney). There has also been talk that Disney may be looking to spin out ESPN.
Disney Plus is not alone in its recent struggles for success. Both Netflix and Warner Brothers (HBO Max) have laid off employees over the last few months to cut costs. Recent struggles by streaming services could be a result of increasing competition in the industry. It could, however, also be because of the content being created.
TV watchers seem to be growing impatient as woke organizations push political talking points in more of the entertainment they produce. As these streaming services continue to worry about their financial performances, it will be interesting to see if any changes are made to the number of overwhelmingly liberal content that is being released.
