Disney is cutting 7,000 jobs as revenues rise and streaming subscriptions fall
The layoffs are part of a drive to cut $5.5 billion in costs at Disney, Iger said. He outlined a reorganization that aims, among other things, to “put creativity back at the heart of the company” and make its streaming business profitable.
In November, Iger stunned the entertainment world when he returned to the top of Disney, replacing Bob Chapek, whose brief tenure was marked by the pandemic strife and PR failures. Iger’s return was seen as a move to restore the company to a golden age that he helped usher in, even as the company faced major obstacles, including a cooling streaming market, a viscous theater business and some of Disney’s biggest franchises – such as Marvel – which is gaining momentum. At the time, Iger promised a return to what he described as the creative “heart and soul” of the company.
Iger on Wednesday touted the job cuts as a necessary part of a “transformation” that includes restructuring the company into three main segments: ESPN; amusement parks; and entertainment, including movies and the Disney Plus streaming service.
Streaming is vital to the company’s future success, Iger said.
“There’s a lot to accomplish, but let me be clear: this is my number one priority,” he said, adding that the company aims to make Disney Plus profitable by the end of 2024.
Disney Plus lost 2.4 million subscribers from October to December, the company said Wednesday as part of its quarterly earnings report.
Disney still generated $23.5 billion in revenue for the quarter, an 8 percent increase over the same period last year. Disney shares rose more than 5 percent in after-hours trading.
The layoffs at Disney come as other notable companies have cut masses of workers in recent months – particularly those in the technology, finance and housing sectors, who are more sensitive to the rising cost of borrowing due to higher interest rates. Despite the high-profile layoffs, unemployment remains at its lowest level in decades.