Disney begins 1,000 job cuts this week across the company
Published in Business News
The Walt Disney Co. has begun a broad round of layoffs that is expected to result in 1,000 jobs being cut across multiple divisions within the Burbank entertainment giant.
The layoffs, which began Tuesday, will ripple across Disney's television and movie studios, sports giant ESPN, its product and technology unit, corporate functions and marketing, according to a person familiar with the retrenchment but not authorized to comment.
Chief Executive Josh D'Amaro notified Disney staff members about the looming cuts on Tuesday morning. In the message, viewed by The Times, D'Amaro acknowledged the elimination of roles was difficult — but necessary.
"Given the fast-moving pace of our industries, this requires us to constantly assess how to foster a more agile and technologically-enabled workforce to meet tomorrow's needs," D'Amaro wrote in the note. "We will be eliminating roles in some parts of the company and have begun notifying impacted employees."
The move follows Disney's announcement in January that it would consolidate its marketing division. But the cuts are hitting other corners of the company, too. The traditional television business, which has been reeling from the steady erosion of what was once an economic pillar — programming fees from ESPN, Disney Channel and other popular outlets — will reduce its headcount.
Consumers have drifted to streaming services, which offer leaner profits and a more fickle customer base.
"Over the past several months, we have looked at ways in which we can streamline our operations in various parts of the company to ensure we deliver the world-class creativity and innovation our fans value and expect from Disney," D'Amaro said in the note.
The cost cutting is one of the first major moves since D'Amaro became chief executive last month.
After officially taking the reins, D'Amaro told employees he wants the company — which includes film and TV studios, a tourism division, streaming services and live sports programming — to operate as "one Disney," saying the global businesses all play a role in deepening consumers' relationship with the brand and its characters.
Disney had about 230,000 employees at the end of last year. Much of its workforce is spread throughout its theme parks and resorts around the world and its cruise line businesses. Those units, for now, have been spared from the bulk of the cuts.
"Those that will be leaving us have done meaningful work here," D'Amaro wrote Tuesday of the cuts in the other areas. "These decisions are not a reflection of their contributions, or of the overall strength of the company. Rather, they reflect our continual evaluation of how to more effectively manage our resources and reinvest in our businesses."
Disney is not alone in reducing its workforce.
Last week, Sony Pictures Entertainment said it planned to cut hundreds of its employees worldwide as it looked to restructure its business. Paramount Skydance, since its takeover by David Ellison, has eliminated more than 2,000 jobs. Even Amazon and Netflix have jettisoned jobs.
Disney erased at least 8,000 jobs after D'Amaro's predecessor, Bob Iger, returned for his second stint as chief executive officer in November 2022. Iger determined that Disney was cranking out too many TV shows and made-for-streaming movies, many of which didn't live up to the company's high standards of quality and diluted its blockbuster franchises.
This year, the company has been centralizing its operations, including folding its marketing for entertainment, sports and experiences into a single division that reports to Asad Ayaz, its chief marketing officer.
The streamlining is a way to reduce expenses and better organize a sometimes confusing reporting structure.
Disney marketers have been under pressure to win positive social media exposure for its film releases amid declines in TV advertising.
The theatrical business has been tumultuous since the pandemic, and Disney has exhibited an over-reliance on sequels as audiences primarily gravitate toward familiar fare, including sequels and reboots, even as they profess to want new stories.
Disney's "Hoppers" from Pixar has been a success, generating more than $350 million at the worldwide box office since its March release. Next month, Disney is banking on a huge opening for "The Devil Wears Prada 2."
Such challenges come as domestic streaming subscriber growth has stalled in recent quarters, tasking Disney with the need to retain customers. The company has been focused on bundling its services to cut down on subscriber churn. The company also has been working to integrate the Hulu and Disney+ platforms.
ESPN also faces headwinds, particularly as marquee sports leagues ratchet up the cost of their TV rights deals as technology companies, including Amazon and Netflix, swarm the field.
ESPN bowed out of its "Sunday Night Baseball" contract with Major League Baseball, citing too high of fees. Traditional broadcasters are bracing for the next round of NFL negotiations.
Disney also is trying to bolster its stock price that has been stuck despite a broader market rally in recent years.
Its shares traded around $102.40 Tuesday — up 10% from late March when investors were skittish that the Iran War would prompt a consumer pullback in spending due to higher gas prices, which could hurt Disney, which relies heavily on tourism.
"I remain optimistic about where we're headed as a company," D'Amaro said in Tuesday's note.
"Compassion and respect remain at the heart of our company," D'Amaro wrote. "As we move forward through this transition, our priority is to support those impacted and help each person navigate what comes next with resources, guidance, and direct support."
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