To reduce expenses and build a more “streamlined” company, Walt Disney Co. started 7,000 layoffs on Monday, according to Chief Executive Bob Iger’s letter to staff members and seen by Reuters.
According to a person familiar with the situation, several important departments of the corporation, including Disney Entertainment, Disney Parks, Experiences and Products, and corporate, would be impacted. ESPN was not affected by the cutbacks this week, but it is predicted to be in subsequent rounds.
Walt Disney would start informing the first set of affected workers over the next four days
Since its exuberant embrace of video streaming, when significant media corporations lost billions as they formed rivals to Netflix Inc., the entertainment sector has seen a recession. As Netflix reported its first subscriber drop in a decade at the beginning of 2022, media businesses started cutting expenditures as Wall Street started to put profitability ahead of customer growth.
Iger stated that Disney would start informing the first set of affected workers over the next four days. In April, there will be a second, more significant round of layoffs “with thousands more personnel cutbacks.” The letter said that the final round would commence before the start of the summer. Iger noted that many “contribute a lifetime enthusiasm for Disney” to their job, adding that it was a “painful truth” that many friends and coworkers were departing Disney.
The firm has been experiencing increasing anxiety levels
A source stated that the television production and acquisition departments were among the first sectors to be slashed, leading to senior executives’ resignations. Although the firm had kept the specifics of the layoffs under wraps, insiders had predicted they would occur before Disney’s annual shareholder meeting on April 3.
As speculations about potential budget cuts circulated, Disney has been experiencing increasing anxiety levels. According to a Disney official, “It’s a dark, black box.” It’s been a long time coming, according to Michael Nathanson, an analyst with SVB MoffettNathanson. He noted that the business started “whispering” about the need to slash expenses last autumn when Bob Chapek was still Disney’s CEO.
In February, theme park staff received a message from Josh D’Amaro, chair of Disney Parks, Experiences and Products. The message was alerting them of impending budget cuts for the successful sector. “Guest-facing” services at Walt Disney World Resorts in Orlando, Florida, are not anticipated to be impacted by the layoffs, according to two of the unions representing cast members there. Now the trend of massive layoffs has taken a slight shift from all the tech firms to these platforms.