According to a memo from Chief Executive Bob Iger, it will start making layoffs this week, the first of three rounds that will result in around 7,000 job cutbacks before the start of the summer. The cuts are a part of a larger initiative to lower company expenses and increase free cash flow. Disney announced last month that it would reduce spending by $5.5 billion, including $3 billion on content.
Iger stated in the memo, which CNBC was able to get, that “this week, we begin contacting employees whose positions are impacted by the company’s staff reductions.” Over the course of the next four days, leaders will directly inform the first group of impacted employees of the news. We anticipate to start the final round of notifications before the start of the summer to accomplish our 7,000-job target. A second, larger wave of notifications will take place in April with thousands more personnel cutbacks.
The initial announcement of the layoffs was made in February. The company-wide layoffs will affect ESPN, Disney’s parks and resorts, and its media and distribution operations.
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Disney is imitating Warner Bros. Discovery and other traditional media companies that are reducing spending and hiring. Disney has stated that in 2024, its streaming division, which is dominated by Disney+, Hulu, and ESPN+, will stop losing money. Following a 44% decline in value last year, Disney stock is up about 8% this year.
Check out the tweet related to this topic:
Disney layoffs will begin this week, CEO Bob Iger says in memo https://t.co/9qlVrqF5KE
— CNBC (@CNBC) March 27, 2023
Iger wrote, “As part of a strategic realignment of the company, including significant cost-saving measures necessary for creating a more effective, coordinated, and streamlined approach to our business, we have decided to reduce our overall workforce by approximately 7,000 jobs. “For those of our employees who are unaffected, I want to acknowledge that there will undoubtedly be difficulties as we continue to develop the systems and processes that will allow us to succeed going forward.”
Iger has reorganized the business since taking over as CEO and said he would think about selling Hulu. Disney’s annual shareholder meeting will take place on April 3.
