Disney, a major player in the entertainment industry, is firing 7,000 employees as part of a cost-cutting strategy to tackle the challenges the company is facing. During the company’s earnings call for the December quarter, CEO Bob Iger made the announcement. Despite having to make a difficult choice, Iger praised the talent and commitment of Disney employees all across the world.
Through a strategic reorganisation of its operations, Disney hopes to save about $3 billion in the next years on the content side, excluding sports. The three major business segments created by the restructuring are Disney Entertainment, ESPN, and Disney Parks, Experiences, and Products.
The company aims to save $5.5 billion in costs across the entire organisation, resulting in a more efficient, integrated, and simplified approach to operations. Disney+, the company’s streaming service, reported a loss of about $1.5 billion during the most recent quarter. Disney anticipates that the streaming service will make a profit by the end of the current fiscal year (2024).
Disney+ and other streaming services are part of the direct-to-consumer sector, which witnessed a 13% growth in revenue to $5.3 billion with an operating loss of about $1.1 billion. For Disney to address its challenges and run its companies more successfully in a difficult economic environment, layoffs and reorganisation are a necessary step.
Despite the difficult decision, the company is still dedicated to providing its customers with top-notch entertainment and experiences.