As it uncovers vast building, Disney is laying off nearly 7,000 jobs and $5.5 billion in expenses
February 14, 2023: -On Wednesday, Disney said it plans to reorganize into three segments while slashing thousands of jobs and costs.
The move marks Bob Iger’s significant action since returning to the company as CEO in November. Disney stated that the changes minutes after it posted its latest quarterly earnings. The statements also come as Disney engages in a proxy argument with activist investor Nelson Peltz and his company Trian Management.
“We are delighted that Disney is listening,” a Trian person familiar with the matter said on Wednesday.
On Wednesday, in its quarterly earnings call with investors, Disney announced it would be slashing $5.5 billion in costs, creating up to $3 billion from content, which does not include sports and the remaining $2.5 billion from non-content slashes. Disney executives said about $1 billion in cost-cutting was already underway since last quarter.
Disney also stated it would be removing 7,000 jobs from its workforce. According to an SEC filing, that would be about 3% of the 220,000 people it employed as of October 1, with approximately 166,000 in the U.S. and about 54,000 internationally.
On Thursday, Disney’s stock increased about 6% in premarket trading. Iger is scheduled to be interviewed at 9 a.m. ET hour.
Media firms, like Warner Bros. Discovery, have been pulling back on content spending and looking to create their streaming businesses profitable. Increased competition led to slowing subscriber growth, and firms have been looking to find new avenues of revenue growth. Many, such as Disney+ and Netflix, have added more affordable, ad-supported options.
“We will take a tough look at the cost of everything we make all over the television and film,” Iger stated on a call with investors on Wednesday.
The reorganization is on its way since Iger returned to the helm of Disney, which replaces his hand-picked successor Bob Chapek.
The entertainment group, led by top lieutenants Dana Walden and Alan Bergman, each considered a contender to take over for Iger in less than two years. Therefore Josh D’Amaro, already the head of Disney’s parks, experiences and products detail, will stay in control. ESPN Chairman Jimmy Pitaro will lead the ESPN piece.
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