Disney Corp. to lay off a whopping 7,000 employees in a massive restructuring! Disney to Cut $5.5 Billion Worth of Costs in Response to “Disney Plus” Losses

Last Updated on 02/10/2023 by てんしょく飯

Disney will lay off 7,000 employees in an effort to cut costs worth $5.5 billion (about 720 billion yen).

On Wednesday, February 5 (U.S. time), Disney CEO Bob Iger announced during the company’s first-quarter earnings call that “we will be cutting approximately 7,000 employees.

While this is necessary to address the challenges we face today, I do not make this decision lightly. I have tremendous respect and appreciation for the talent and dedication of our employees around the world and am mindful of the personal impact these changes will have.” He added that the 7,000 employees represent approximately 3% of the company’s global workforce.

Disney will reduce its workforce by 7,000 employees in a bid to cut costs, CEO Bob Iger said. The layoffs are part of Disney’s efforts to achieve about $5.5 billion in cost savings. https://t.co/Fj8bWt2Kx3 pic.twitter.com/WpojK0U66v

— Variety (@Variety) February 8, 2023

In response, Disney announced plans to reorganize the organization into three units: Disney Entertainment, ESPN, and Disney Parks Experience and Products.

Disney’s stock price rose as much as 8% following Iger’s comments about job cuts and cost reductions. The stock later gained about 5% in after-hours trading, with a small gain.

The significant job cuts appear to be due to a decline in subscribers and losses in the “Disney Plus” video streaming service.

Because the Indian brand “Disney+ Hotstar” (which co-brands a pay-tier using Hotstar, an existing service in India) did not deliver the Indian Premier League cricket tournament, “Disney Plus” subscribers declined slightly in the first quarter with a decline in the first quarter.

Streaming losses narrowed to $1.1 billion ($174.6 billion) in the first quarter, compared to a loss of $1.5 billion ($197 billion) in the fourth quarter.

Iger said the new strategic organization “will be more cost-effectively coordinated and streamlined in its approach to operations, and promises to run the business more efficiently, especially in a tough economic environment.”

Iger emphasized the commitment to a direct link between content decisions and business performance. He also stated that “Disney Plus” is on track to be profitable by the end of FY2024.