Disney is planning to fire 7,000 workers to cut costs across the company. The mass media and entertainment conglomerate announced on Wednesday.
That it is planning to reorganise its work structure and slash jobs to reduce costs. The big decision was announced right after the company’s announcement of recent quarterly earnings.
Just like the turmoil in other tech giants in the US and around the world, Disney is also taking harsh steps amid a “challenging economic environment.” Reports suggest that Disney started the plan for cost-cutting and layoffs as soon as the company’s CEO Robert Iger took over from former CEO Bob Chapek last November.
Notably, Iger served as the company’s CEO for 15 years before he stepped down from his position in 2020. However, with his return, the company has already started going through some significant organisational changes, including the decision to cut down on employee counts.
According to the official release by Disney about the quarterly earnings, the company witnessed a slowdown in subscriber growth rate similar to its rival Netflix. What made things more tense was that the streaming platform Disney Plus only added 200,000 subscribers in the US and Canada, bringing its total to 46.6 million subscribers.
On the international front, excluding Hotstar, the streaming service saw an increase of 1.2 million members. Meanwhile, its other platforms, Hulu and ESPN Plus witnessed modest growth in subscriber rate, with 800,000 and 600,000 new subscribers added respectively.
The upcoming layoffs at Disney were announced by CEO Iger during a call with analysts after Disney posted its latest quarterly earnings. “I do not make this decision lightly. I have enormous respect and appreciation for the talent and dedication of our employees worldwide,” Iger said. He further added that he’s “targeting $5.5 billion of cost savings across the company” and that the cost-cutting and reduced workforce count will “help achieve this.”
“Our priority is the enduring growth and profitability of our streaming business,” Iger said. “Our current forecasts indicate Disney Plus will hit profitability by the end of fiscal 2024, and achieving that remains our goal,” Iger continued. However, the Disney CEO didn’t reveal which departments will be impacted with the layoffs.
As for the restructuring of the departments, the company revealed that it will now reorganise into three divisions – Disney Entertainment, ESPN division and Parks, Experiences and Products unit.