A Disney restructuring exercise will see the firing of 7,000 employees very soon and will generate $5.5 billion in cost savings. Walt Disney Co CEO Bob Iger made the announcement on February 8.
Massive Disney restructuring exercise
The layoffs represent an estimated 3.6% of Disney’s global workforce.
Iger also announced that the company will be reorganized into three divisions: an entertainment unit that includes its main TV and film businesses, the ESPN sports networks and the theme park unit, which includes cruise ships and consumer products.
Subscribers to the Disney+ streaming business declined 1% in the quarter to 161.8 million, the first big decline, amid cancellations of the Hotstar service in India after Disney lost streaming rights to cricket there.
Disney’s streaming division suffered huge losses, doubling to $1.05 billion from a year earlier.
“The work we are doing to reshape our company around creativity, while reducing expenses, will lead to sustained growth and profitability for our streaming business, better position us to weather future disruption and global economic challenges and deliver value for our shareholders.” said Iger in a statement.
Iger also told analysts, “This reorganization will result in a more cost-effective, coordinated approach to our operations. We are committed to running efficiently, especially in a challenging environment,” when they spoke of the Disney restructuring exercise.
Theme Parks Shining
He said streaming remained a mainstay and would be prioritized. “We will focus even more on our core brands and franchises and aggressively curate our general entertainment content.”
Its theme parks have continued to shine however with revenue in that division increasing 21% to $8.74 billion and earnings climbing 25% to $3.05 billion.
According to Reuters, the restructuring is a new chapter in Iger’s leadership. He went on to fortify Disney with a host of entertainment brands, acquiring Pixar Animation Studios, Marvel Entertainment and LucasFilm. Iger also repositioned the company to focus on the streaming revolution, acquiring 21st Century Fox’s film and television assets in 2019 and launching the streaming service shortly after.
Iger stepped down as CEO in 2020 but came back in November 2022. Now, Iger is pushing for the Disney restructuring exercise.