As part of a multibillion-dollar cost-cutting plan aimed at streamlining the company’s operations amid a time of media industry unrest, Disney announced that it would eliminate 7,000 jobs from its global workforce. As of October 1, Disney employed roughly 220,000 people, of whom about 166,000 were based in the US. 7,000 jobs lost would account for around 3% of the global workforce.
Cost Saving Attempts
The job layoffs are a result of cost-cutting measures that were also revealed on Wednesday. Bob Iger (CEO of Disney) stated that the business aims to save $5.5 billion in costs overall, $2.5 billion of which will come from annual cost savings in “non-content” operations. In terms of content operations, the company means commercial enterprises like movies and television programs.
It was stated that labor savings would account for 30% of cost savings, technology and procurement would account for 20% of cost savings, and marketing expenses would account for 50% of cost savings. It is a major advertiser, so a $1 billion decrease in annual marketing spending portends greater problems for both tech and other media industries.
Iger made the significant employment layoffs known after the business reported fourth-quarter 2022 financial results that exceeded expectations. Disney’s revenue for the quarter increased by 8% to $23.5 billion, exceeding analysts’ expectations, according to Refinitiv, which had been $23.4 billion.
Alarming Subscriber Losses
Although Disney reported losing Disney+ streaming customers in the most recent quarter, it was nevertheless able to reduce its losses over the prior three months. Disney reduced streaming marketing costs and changed pricing strategies in an effort to draw more lucrative subscribers.
At the end of the quarter that concluded on October 1, there were 162 million members, a 1% decrease from 164 million. However, subscriber counts for its other streaming ventures, such as ESPN+ and Hulu, in which it has a stake, also increased by 2%. Despite the fact that it was nearly twice as much as the $593 million loss it posted a year earlier, this enabled Disney to reduce its losses in the entire streaming business to $1.1 billion in the quarter from $1.5 billion in the quarter ending October 1.
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