Entertainment giant Disney is laying off 7,000 employees as part of a cost-cutting strategy to address the challenges the company is facing. CEO Bob Iger announced the move during the company’s earnings call for its December quarter. Despite the tough decision, Iger expressed his appreciation and respect for the talent and dedication of Disney’s employees worldwide.
Disney aims to deliver approximately $3 billion in savings over the next few years on the content side, excluding sports, through a strategic reorganisation of its operations. The reorganisation will result in three core business segments: Disney Entertainment, ESPN, and Disney Parks, Experiences, and Products. This will lead to a more cost-effective, coordinated, and streamlined approach to operations, with the company targeting $5.5 billion in cost savings across the entire organisation.
The company’s streaming business, Disney+, saw a loss of around $1.5 billion last quarter. However, Disney forecasts that the streaming service will reach profitability by the end of fiscal 2024. The direct-to-consumer division, which includes Disney+ and other streaming services, saw a 13% increase in revenue to $5.3 billion, with an operating loss of nearly $1.1 billion.
In conclusion, the layoffs and reorganisation are a necessary step for Disney to address its challenges and run its businesses more efficiently in a challenging economic environment. Despite the difficult decision, the company remains committed to delivering high-quality entertainment and experiences for its customers.