The Walt Disney Company announced on Monday, March 27, that it already began letting go of 7,000 of its workers in a mass layoff the company announced earlier this year. Chief Executive Officer Bob Iger said the layoffs are necessary for the company to control costs and create a more "streamlined" business.
The job cuts were initially announced in February and will affect most divisions within the company, including Disney's media and distribution division (Disney Entertainment), parks and resorts (Disney Parks, Experiences and Products) and the sports television channel ESPN. This is part of Disney's plan to cut around $5.5 billion in costs, including around $3 billion from what it currently spends on content. (Related: Disney is on the verge of financial collapse, leaked memo reveals.)
"This week, we began notifying employees whose positions are impacted by the company's workforce reductions," wrote Iger in a memo sent to employees and seen by media outlets. "Leaders will be communicating the news directly to the first group of impacted employees over the next four days.
"A second, larger round of notifications will happen in April with several thousand more staff reductions," he added. "And we expect to commence the final round of notifications before the beginning of summer to reach our 7,000-job target."
Disney did not reveal the full extent of the first round of layoffs on Monday or the exact impact it will have on day-to-day operations at the company. But sources who spoke with media outlets noted that Disney's television operations appear to be taking the hardest hits.
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Among the notable staffers let go are Jayne Bieber, senior vice president for production at the television channel Freeform and the content brand Onyx Collective; Mark Levenstein, head of production and post-production at the streaming service Hulu; and Elizabeth Newman, head of the acquisitions department at Disney.
"For our employees who aren't impacted, I want to acknowledge that there will no doubt be challenges ahead as we continue building the structures and functions that will enable us to be successful moving forward," wrote Iger. "I ask for your continued understanding and collaboration during this time."
"This company is home to the most talented and dedicated employees in the world," wrote Iger. "It makes it all the more difficult to say goodbye to wonderful people we care about. I want to offer my sincere thanks and appreciation to every departing employee for your numerous contributions and your devotion to this beloved company."
Disney retrenchment part of downsizing in entertainment, media industries
Media and entertainment industries in the United States have been undergoing a series of retrenchments as companies like Disney and Netflix are beginning to prioritize focusing on profitability over growth. Warner Bros., Discovery and many other legacy media companies have also announced cuts to jobs and spending.
Disney noted that its streaming business, led by Disney+, Hulu and ESPN+, is still not profitable. The company added that its streaming services will only stop losing money in 2024 after losses narrowed to $1.1 billion from $1.5 billion in its latest quarter. Iger even noted that he would consider selling Hulu if it continues to be unprofitable.
Since taking over as CEO in late November 2022, Iger has started restructuring the organization of the Walt Disney Company into three core business segments: entertainment ESPN and parks, resorts and products.
In the company's first-quarter earnings report on Feb. 8, Iger said the reorganization "will result in a more cost-effective, coordinated and streamlined approach to our operations, and we are committed to running our business more efficiently, especially in a challenging economic environment."
Learn more about the state of the American economy at MarketCrash.news.
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