Disney plans to layoffs 7000 employees worldwide and cut $5.5 billion in cost — this comes as the first major decision of CEO Bob Iger after retaking his position.
Disney lays off 7000 employees worldwide
On Wednesday, 8 February, Disney announces its plans of laying off 7,000 employees and cutting $5.5 billion in costs. This comes as the first major decision of Disney’s CEO Bob Iger since his re-allotment as the leading personality of the company last year.
- Disney carried out its quarterly earnings call with investors. During the same event, Disney also announces its plan of cutting $5.5 billion in costs. This includes $3 billion from its content, however, excluding sports.
- They plan to reduce the remaining $2.5 billion from non-content cuts. Moreover, Disney executives relay that $1 billion in cost-cutting was already in progress since last quarter.
Results of the Pandemic and Disney’s divisions
According to NDTV, the 7000 layoffs follow a similar pattern to other US tech giants. Many chose to lay off thousands of their employees as the economy drops. It also comes as a reaction to the company hiring spurts during the height of the pandemic.
- Disney’s CEO, Bob Iger reasons his decision over a call with analysts stating it wasn’t a light decision. “I have tremendous respect and much appreciation for the talent and dedication of our employees worldwide.”
- According to Disney’s 2021 annual report, the group employed 190,000 people worldwide out of which 80 percent were full-time.
- The entertainment and media mogul, Disney announces it will further progress as an entity of three divisions:
- Disney Entertainment – This will include most of Disney’s streaming and media operations.
- Disney ESPN division – This shall include the TV network and the ESPN+ streaming service.
- Parks, Experiences, and Products unit – As the name states, this will include Disney World and its other products.
Was Disney’s major layoffs necessary?
The company founded by Walt Disney relayed its current conditions. Their streaming service Disney+ experienced its first-ever fall in subscribers last quarter.
- Subscribers of Netflix, a major rival of Disney+, in comparison to previous months, saw a total decline of one percent. It accumulated 168.1 million customers at the year-end of 2022.
- Global analysts already expected the decline and even share prices of Disney to be stable at eight percent higher in post-session trading.
$DIS Another reorg + 7k layoffs. Parks still printing money like crazy & now make up 100% of Disney’s operating income! 😳 Media just a break-even biz, even with streaming shrinking. 🙈$5.5bn in savings planned but only $1bn this year. Divvy back… soon. Uncharted waters? 🛥️ pic.twitter.com/blNG7rlsT3
— Wasteland Capital (@ecommerceshares) February 9, 2023
- Investors didn’t face any strain due to Disney’s lower-than-expected losses for its streaming services at $1 billion for the last quarter of 2022.
- Moreover, The Disney Group saw revenues of $23.5 billion for the three months, which exceeds the expectations of analysts. Due to this, Disney’s layoffs come as a minor surprise.
DISNEY NOW UP 8% AFTER ANNOUNCING LAYOFFS pic.twitter.com/nsl0IG0KS5
— GURGAVIN (@gurgavin) February 8, 2023
Disney’s management conflicts
Disney has been facing some internal conflicts. In 2020, Bob Iger stepped down from his position of CEO after almost two decades of leading the company. He was reappointed following the dismissal of his replacement Bob Chapek by the board of directors.
- The reasons for the dismissal of Chapek were due to the disappointing management of costs. He was also dismissed for centralizing power around executives who made critical decisions on content despite their lack of Hollywood experience.
- Currently, Bob Iger’s new term as CEO is facing much turbulence. This includes a campaign by activist and investor Nelson Petz. He demands major cost-cutting after according to his belief Disney overpaid to buy the 20th Century Fox movie studio.
Also Read: Disney+ Philippines: Everything you need to know
Maybe Disney should try not portraying America as a land of bigots who are the product of a vile, tainted history, deserving of humiliation and Maoist-style re-education.
Woke Disney announces massive layoffs amid financial woes, row with FL Republicans https://t.co/ium9ggLTqx
— Nan Hayworth, M.D. (@NanHayworth) February 8, 2023
Is Disney no longer the magical kingdom?
The dreamland, apart from internal conflicts, is also caught in a dispute with the governor of Florida Ron DeSantis. The governor desires to regain control of the surrounding area of Walt Disney World. The area is currently under the control of Disney since a long time ago.
- Adding fuel to the conflict, conservative leader DeSantis, who is a possible US presidential candidate, disapproves of Disney for criticizing a state law against a school’s curriculum including lessons on sexual orientation.
Also Read: EA Laying Off 350 People; Marketing and Publishing Organization, Operations Teams & Presence in Japan and Russia
Current List of Mass Layoffs:
1. Amazon: Laying of 10,000+ this week
2. Twitter: 50% of workforce
3. Snapchat: 20% of workforce
4. Meta: 13% of workforce
5. Credit Suisse: 5% of workforce
6. Apple: Hiring freeze
7. Disney: Hiring freeze
Unemployment is set to skyrocket.
— The Kobeissi Letter (@KobeissiLetter) November 14, 2022
All these struggles of Disney group lead to CEO Bob Iger’s decision to conduct layoffs of 7000 employees and cut costs. Do you believe it is a wise and timely decision? let us know in the comments below and follow Spiel Times for more latest entertainment updates across the globe.
