Just when workforce reductions in the tech industry are starting to die down, Disney has started another round of layoffs, which is only the second out of all the three planned. Thousands of employees have already been impacted by the move.
Disney Fires Thousands of Employees
The entertainment giant has been looking for ways to cut costs, and unfortunately, employment termination is among the solutions that it's looking into. Reports say that Disney has already laid off thousands this week alone.
It was already announced back in March that the reduction will impact around 7,000 employees. The current round of layoffs is not yet done, since as mentioned in The Verge, Disney will continue through Thursday and will revisit the reduction within the year.
There are still no specifics as to which departments will be affected the most, although reports did mention that Disney's subsidiaries such as ESPN and Disney Entertainment, as well as the products division and corporate leadership in Disney Parks, are not safe from layoffs.
Alan Bergman and Dana Walden, Disney Entertainment co-chairs said that the senior leadership teams have been working diligently to "define our future organization. The company's priority is to get it right as opposed to getting it done fast.
The two also expressed their recognition of the difficult times ahead, addressing it as a "period of uncertainty," and proceeded to thank every for their understanding and patience. It's still not disclosed how many more employees will be unemployed by Thursday.
Disney Tightens Its Belt
Bob Iger returned as the entertainment giant's CEO to save it, and he proposed cutting costs by $5.5 billion in his first earnings call to do so. This decision resulted in the plan to cut off 7,000 jobs, which is about 4% of the company's total number of employees globally.
Disney CEO Bob Iger stated that the company should return creativity to the center of the company, increase accountability, improve results, and ensure the quality of its content and experiences, as mentioned in The New York Times.
It also lost millions of subscribers on its streaming platform, Disney+. In the fourth quarter of 2022, Disney had 234,7 million subscribers in Disney+, Hulu, and ESPN+. Although that number looks impressive, it actually went down from 235.7 million in early October.
Counting the subscribers of Disney+ alone, it's still far from the leading streaming service, Netflix, which has 232.5 million subscribers, as opposed to Disney+ which only has 161.8 million. The total number is a result of losing around 2.4 million subscribers.
Iger expressed it was obvious that Disney cannot get to profitability and turn it into a growth business without growing subscriptions, and that the company might have gotten a little too aggressive in marketing the service globally.
Although comparing the company's growth to 2021's fourth quarter, Disney's streaming service saw a 13% increase in revenue with $5.3 billion. To gather more subscribers, the company will focus more on content that appeals to the general audience like new "Toy Story" or "Frozen" sequels.
