Disney layoffs 7,000 employees to reward shareholders

As part of a cost-cutting measure, Disney has fired 7,000 employees

San Francisco, Feb 09: Entertainment giant Disney has announced that it will layoff 7000 employees or about three per cent of global workforce as part of cost-butting measures after its streaming service saw it's first ever fall in subscribers last quarter.

"While this is necessary to address the challenges we're facing today, I do not make this decision lightly," CNN quoted CEO Bob Iger as saying on Wednesday. He added, "I have enormous respect and appreciation for the talent and dedication of our employees worldwide, and I'm mindful of the personal impact of these changes."

According to the reports, the company had 2.2 lakh workers as of October 1 out of which 1.66 were employed in the US. While the employees faces the brunt of job loss, Iger, who was reinstated as the CEO in November 2022, is taking steps to reward the shareholders.

The company has aims to reduce $2.5 billion in sales and general administrative expenses and other operating costs and $3 billion in savings would come from reductions in non-sports content, including the layoffs Iger said, according to a report in New York Times.

The subscriber of Disney+ witnessed a 1 per cent drop to 168.1 million on December compared to three months earlier, but saw better than expected revenues of $23.5 billion for the three month period.

Disney will restructure into three segments: an entertainment unit that encompasses film, television and streaming; a sports-focused ESPN unit; and Disney parks, experiences and products. However, the streaming remains the top priority. "We are committed to running efficiently, especially in a challenging environment," Iger added.

It has to be noted that this is Disney's third restructuring in five years. In a step to accelerate the growth in its streaming business, it had reorganised its business in 2018 and again in 2020 during the pandemic. It had fired 32,000 workers, mainly at its theme parks.

After associating with the company for two decades, Iger had stepped down as CEO in 2020. He returned to lead the company in November after the board fired Bob Chapek as the company's leader. The previous boss was accused of running the show with a small group of executives despite having no experience in Hollywood.

Activist investor Nelson Peltz, who had criticised the company for overspending on streaming, welcomed the cost-cutting measures. "We are pleased that Disney is listening," a spokesperson for Peltz's Trian Group said in a statement late Wednesday.

Founded in 1923, Disney is headquartered at the Walt Disney Studios complex in Burbank, California. Today, the multinational company is one of the largest and most popular media companies in the world with its theme parks, branded products and media franchises.