According to a memo from CEO Bob Iger, layoffs will begin this week, the first of three rounds that will result in approximately 7,000 employment cuts by the beginning of summer. The reductions are part of a larger plan to reduce company expenses and increase free cash flow. Last month, Disney announced it would reduce spending by $5.55 billion, including $3 billion on content.
Iger stated in the memo, which CNBC was able to get, that “this week, we begin contacting employees whose positions are impacted by the company’s staff reductions.”
In the next four days, leaders will directly communicate the news to the first group of affected employees. To reach our 7,000-job goal, we anticipate initiating the final round of notifications before the start of the summer. In April, a second, larger wave of layoff notices will be issued, involving thousands more personnel reductions.
The initial layoffs announcement was made in February. ESPN, Disney’s parks and resorts, and its media and distribution operations will all be affected by the company-wide reductions.
Disney layoffs will begin this week, CEO Bob Iger says in memo https://t.co/9qlVrqF5KE
— CNBC (@CNBC) March 27, 2023
Disney is following in the footsteps of Warner Bros. Discovery and other traditional media companies by reducing spending and hiring. Disney has stated that in 2024, its streaming division, which is dominated by Disney+, Hulu, and ESPN+, will cease losing money. Following a 44% decline in value during the previous year, Disney stock is up approximately 8% this year.
Iger wrote, “As part of a strategic realignment of the company, including significant cost-saving measures necessary for creating a more effective, coordinated, and streamlined approach to our business, we have decided to reduce our overall workforce by approximately 7,000 jobs. “For those of our employees who are unaffected, I want to acknowledge that there will undoubtedly be difficulties as we continue to develop the systems and processes that will allow us to succeed going forward.”
Iger has reorganized the business since taking over as CEO and said he would think about selling Hulu. Disney’s annual shareholder meeting will take place on April 3.