In a memo sent by CEO Bob Iger, Disney has announced that it will initiate layoffs this week, marking the beginning of three rounds of job cuts that will result in approximately 7,000 job losses before summer. The decision to lay off employees is part of a larger plan to reduce corporate spending and increase free cash flow. Last month, Disney announced that it intends to cut $5.5 billion in costs, with $3 billion of those savings coming from content spend.
According to a memo shared by CNBC, Disney CEO Bob Iger stated that the company will start informing employees of job cuts this week. The first round of notifications will affect a group of employees and will take place over the next four days. The second round, which will result in several thousand more staff reductions, is set to happen in April, while the final round is expected to take place before the beginning of the summer to reach the company’s target of cutting 7,000 jobs. These layoffs are part of a broader cost-cutting effort aimed at reducing corporate spending and increasing free cash flow, with Disney aiming to cut $5.5 billion in costs, including $3 billion in content spend.
In February, Disney announced the upcoming layoffs which will affect various departments across the company including media, distribution, parks and resorts, and ESPN.
Similar to other legacy media companies, including Warner Bros. Discovery, Disney is implementing job cuts and cost-cutting measures. Despite this, Disney has shared plans for its streaming business, which includes Disney+, Hulu, and ESPN+, to break even by 2024. After experiencing a 44% drop in shares last year, Disney’s stocks have increased by approximately 8% this year.
In a memo obtained by CNBC, CEO Bob Iger stated that Disney has made the tough decision to reduce its workforce by about 7,000 jobs as part of a strategic realignment of the company. This is in line with the company’s cost-cutting measures aimed at creating a more effective and streamlined approach to its business. Iger acknowledged that there will be challenges ahead for employees who are not impacted by the layoffs as the company continues to build structures and functions for future success.
After his return as CEO, Iger restructured Disney and expressed openness to selling Hulu. The company’s annual shareholder meeting is scheduled for April 3rd.