LOS ANGELES – Walt Disney on Wednesday announced a sweeping restructuring under recently reinstated boss Bob Iger, cutting 7,000 jobs as part of an effort to save US$5.5 billion (S$7.3 billion) in costs and make its streaming business profitable.
The layoffs represent an estimated 3.6 per cent of Disney’s global workforce.
Disney is the latest media company to announce job cuts in response to slowing subscriber growth and increased competition for streaming viewers. It earlier reported its first quarterly decrease in subscriptions for its Disney+ streaming media unit, which lost more than US$1 billion.
Warner Bros Discovery and Netflix previously underwent layoffs.
Shares of Disney rose 8 per cent to US$120.77 in after-hours trading.
Mr Iger said he would reorganise the company into three segments: an entertainment unit that encompasses film, television and streaming; a sports-focused ESPN unit; and Disney parks, experiences and products.
“This reorganisation will result in a more cost-effective, coordinated approach to our operations,” Mr Iger told analysts on a conference call. “We are committed to running efficiently, especially in a challenging environment.”
Mr Iger said streaming remained Disney’s top priority.
He said the company would focus even more on its core brands and franchises and “aggressively curate” its general entertainment content.
He also said he would ask the company’s board to restore the dividend for shareholders by the end of 2023.
The CEO, who came out of retirement in November to run Disney for two more years, is under pressure to improve financial returns. Activist investor Nelson Peltz is fighting to join Disney’s board, arguing that the company has overspent on streaming and fumbled succession planning.
The last time Disney made job cuts was during the height of the pandemic, when it announced in November 2020 that it would lay off 32,000 workers, primarily at its theme parks. The cuts took place in the first half of fiscal year 2021.
For the quarter that ended on Dec 31, Disney reported adjusted earnings per share of 99 US cents, ahead of the average analyst estimate of 78 US cents, according to Refinitiv data.
Net income came in at US$1.279 billion, below analyst estimates of US$1.429 billion. Revenue hit US$23.512 billion, ahead of Wall Street estimates of US$23.4 billion.
The reorganisation marks a new chapter in the leadership of Mr Iger, whose first tenure as CEO began in 2005. He went on to fortify Disney with a roster of powerful entertainment brands, acquiring Pixar Animation Studios, Marvel Entertainment and Lucasfilm. He also led the company to capitalise on the streaming revolution, acquiring 21st Century Fox’s film and television assets in 2019 and launching the Disney+ streaming service.
Mr Iger stepped down as CEO in 2020 but returned to the role in November 2022.
Now, he will seek to put Disney’s streaming business on a path to growth and profitability. The new structure also makes good on Mr Iger’s promise to restore decision-making to the company’s creative leaders, who will determine what movies and series to make and how the content will be distributed and marketed. REUTERS
