The Walt Disney Company is continuing its major cost-cutting efforts, laying off several hundred white-collar workers this week in a move designed to streamline operations and address financial challenges. About 300 employees from corporate divisions, including legal, finance, human resources, and communications, are being affected by this latest round of layoffs. These cuts, which began on Tuesday, are part of an ongoing initiative under CEO Bob Iger to reduce the company’s expenses by $7.5 billion annually.
Disney has been grappling with declining revenues across several key areas, including its streaming service Disney+ and its theme parks. The company, which once boasted a workforce of 220,000 in 2019, has seen its employee count dwindle to around 170,000 by the end of 2023. The current round of layoffs is expected to be completed by the end of the week and is part of a broader strategic realignment aimed at making Disney more efficient and competitive in an increasingly tough market.
Two media giants, Paramount and Disney, are undergoing significant job cuts this week as they enter the all-important fourth quarter. https://t.co/c2QDghLBRt
— Fast Company (@FastCompany) September 26, 2024
These cuts come on the heels of other significant layoffs earlier this year. In 2023, Disney slashed 7,000 jobs, amounting to roughly 3.2% of its global workforce, as part of Iger’s plan to return the entertainment giant to profitability. The company’s streaming division has been a particular area of concern, as Disney+ has failed to meet subscriber growth expectations, contributing to a sharp decline in Disney's stock value.
In a statement, Disney noted that the layoffs are a necessary step to optimize its business structure. “We continually evaluate ways to invest in our businesses and more effectively manage our resources and costs to fuel the state-of-the-art creativity and innovation that consumers value and expect from Disney,” the company said. This decision is part of an ongoing effort to review and reduce the cost structure of its corporate-level functions.
Disney plans to cut 7,000 jobs as CEO Bob Iger seeks $5.5 billion in savings
Go woke; go broke. Disney can diaf as far as I’m concerned. pic.twitter.com/4AWL254VGn
— 🇺🇸Will🇺🇸 (@notBilly) February 9, 2023
This wave of layoffs reflects the broader turmoil within the media and entertainment industry, which has been hit hard by declining TV revenues, slowing box office numbers, and stiff competition from digital platforms like Netflix and Amazon Prime. Additionally, high production costs for films and television, coupled with lackluster audience reception for some of Disney's recent offerings, have put added pressure on the company. Several of its high-profile projects, including the recent theatrical release of Wish, have underperformed at the box office.
Theme parks, traditionally a stable source of income for Disney, have also been affected by these changes. Rising ticket prices and low attendance, particularly in Florida, have exacerbated the company’s financial struggles. Disney’s CFO recently acknowledged that lower-income visitors are reducing the length of their stays, further impacting revenues.
The entertainment giant’s troubles have been compounded by its involvement in political and cultural controversies, with some critics pointing to Disney’s embrace of progressive themes in its content as a factor in declining viewership. Several movies and series have struggled to find a broad audience, fueling the criticism that Disney’s focus on “woke” content has alienated a significant portion of its consumer base.
Looking forward, Disney is attempting to recalibrate by focusing more on its core brands and reducing its reliance on streaming. The company’s recent moves suggest a shift away from the ambitious expansion of Disney+ and a renewed emphasis on theatrical releases, though it remains to be seen if this strategy will turn around its financial fortunes.
