In an effort to save $5.5 billion in costs, Disney has announced that it will begin cutting 7,000 jobs, starting with notifying employees whose positions will be impacted by the company’s workforce reductions.
The first group of affected employees will be communicated with directly over the next four days, with a second, larger round of notifications happening in April.
Bob Iger, Disney’s CEO, warns that “challenges ahead” will be faced by the employees who remain with the company. In an internal memo obtained by Yahoo Finance, he states that he asks for “continued understanding and collaboration during this time” from the remaining employees.
Disney’s stock remained mostly unchanged following the news, with shares having increased by roughly 10% since the start of the year.
Disney to Cut 7,000 Jobs as Part of Restructuring Plan
Alongside the job cuts, Disney is also restructuring its organization into three core business segments. These are Disney Entertainment, ESPN, Disney Parks, Experiences, and Products.
The goal of this restructuring is to create a more cost-effective and streamlined approach to Disney’s operations, particularly in the current challenging economic environment. Iger has previously stated his commitment to directly linking content decisions with financial performance.
The restructuring plan involves co-chairs Alan Bergman and Dana Walden leading Disney Entertainment, which will comprise the company’s full portfolio of entertainment media and content businesses, including streaming. Jimmy Pitaro will continue to serve as the chairman of ESPN, which will include ESPN Networks, ESPN+, and its international sports channels, while Josh D’Amaro will remain the chairman of Disney Parks, Experiences, and Products.
Iger acknowledges the difficulty of the layoffs, stating that “the difficult reality of many colleagues and friends leaving Disney is not something we take lightly.” However, the restructuring plan and job cuts are necessary to achieve the company’s cost-saving goals.
Disney’s announcement of job cuts and restructuring comes as no surprise, as the entertainment industry has been hit hard by the COVID-19 pandemic. With the economic downturn, companies must adapt to survive, and unfortunately, this often means reducing their workforce. It is a challenging time for those affected, but Disney is making an effort to ensure that those who remain will have a more streamlined and cost-effective work environment.
(With inputs from Yahoo Finance)
Q: How many jobs is Disney planning to cut?
A: Disney is planning to cut 7,000 jobs this year as part of a cost-cutting strategy.
Q: When will the layoffs take place?
A: The first round of notifications has already started, and a second, larger round will happen in April 2023.
Q: Why is Disney restructuring its organization?
A: In addition to the layoffs, Disney is also restructuring its organization into three core business segments: Disney Entertainment, ESPN, Disney Parks, Experiences, and Products, in order to achieve a more cost-effective and streamlined approach to its operations.
Q: What did Disney CEO Bob Iger say about the layoffs?
A: Iger acknowledged that there will be challenges ahead for the employees still present at the company and asked for their understanding and collaboration during this time.
Q: How has the news affected Disney’s stock?
A: Disney’s stock was little changed on the heels of the news, and shares are up about 10% since the start of the year.