In February, Disney CEO Bob Iger told shareholders in an earnings call that the company plans to lay off 7,000 employees as part of a significant restructuring. Today, in an internal memo to employees, which TechCrunch was able to obtain, Iger revealed that there will be three rounds of layoffs, with the first beginning this week.
“This week, we begin notifying employees whose positions are impacted by the company’s workforce reductions,” Iger wrote. “Leaders will be communicating the news directly to the first group of impacted employees over the next four days. A second, larger round of notifications will happen in April with several thousand more staff reductions, and we expect to commence the final round of notifications before the beginning of the summer to reach our 7,000-job target.”
The job cuts will reportedly affect Disney’s media and distribution segment along with ESPN and the parks and resorts division, according to CNBC.
Disney reportedly eliminated its metaverse division, per The Wall Street Journal.
“For our employees who aren’t impacted, I want to acknowledge that there will no doubt be challenges ahead as we continue building the structures and functions that will enable us to be successful moving forward. I ask for your continued understanding and collaboration during this time,” Iger added.
Disney cuts metaverse division as part of broader restructuring
Iger returned as CEO in November 2022, replacing Bob Chapek. Since the takeover, Iger has already made significant organizational changes to the company. In addition to the layoffs, the company will also cut down on spending. Disney plans to cut $5.5 billion in costs, including $3 billion in content spend.
Iger has also admitted to being “open-minded” about the sale of Hulu, which Comcast partially owns.
Despite Disney’s direct-to-consumer division increasing in revenue by 13% to $5.3 billion, the company reported an operating loss of about $1.1 billion, which it blamed on higher costs at Disney+ and Hulu.
While Disney+ reported its first-ever subscriber loss in Q1 2023, the company noted that its streaming business — Disney+, Hulu and ESPN+ — will become profitable in late 2024. Netflix is one streaming service that has managed to turn a profit.
Disney+ lost 2.4 million global subscribers in the first quarter of 2023. However, it managed to gain 200,000 subs in the U.S. and Canada. Hulu and ESPN+, on the other hand, added 800,000 and 600,000, respectively.
Disney’s annual shareholder meeting is set to occur on April 3.
As media companies continue to face losses in the current market, many are adopting the same strategy as Disney. In 2022, Warner Bros. Discovery dealt with job cuts and removed HBO Max content as it confronts a debt load of $53 billion. This company intends to save $3 billion in 2023.
Disney+ reports its first subscriber loss of 2.4M subscribers, plans to lay off 7K employees
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