Entertainment giant Disney announced on Wednesday that it will lay off 7,000 employees as CEO Bob Iger unveiled a reorganization of the company he returned to lead last year. The cuts follow similar moves by U.S. tech giants that are scaling back from a hiring surge that began during the height of the pandemic. “I do not make this decision lightly,” Iger told analysts after Disney posted its latest quarterly earnings.
In its 2021 annual report, Disney said it employed 190,000 people worldwide, 80 percent of whom were full‑time. “We are going to take a really hard look at the costs for everything that we make, both across television and film,” Iger added. “Because things in a very competitive world have just simply gotten more expensive.” The storied company founded by Walt Disney also reported that its streaming service saw its first ever decline in subscribers last quarter as consumers cut back on spending. Disney+ subscribers fell 1 percent to 161.8 million on December 31, compared with three months earlier. Analysts had broadly expected the decline, and Disney’s share price rose more than five percent in after‑hours trading.
“There are still big challenges ahead for Disney,” Insider Intelligence principal analyst Paul Verna wrote in a note to investors. “Its traditional TV business is eroding, its streaming operation is not yet profitable, and it’s facing pressure from an activist investor to rein in costs and plan for a post‑Iger succession.” Iger said Disney will also review the volume of content it produces and the pricing of its streaming services. “We were in a global arms race for subscribers,” he said of Disney+’s early days as a challenger to Netflix and Amazon Prime. “I think we might have gotten a bit too aggressive in terms of our promotion, and we are going to take a look at that.”
Disney remains devoted to blockbuster franchises, including recent Marvel superhero film *Black Panther: Wakanda Forever* and upcoming sequels to animated hits such as *Frozen* and *Zootopia*, Iger noted. Whether the layoffs and corporate restructuring will appease critics and put Disney on a more solid footing remains uncertain, Verna cautioned.
Across its vast entertainment empire—theme parks, film studios and cruise ships—Disney reported revenues of $23.5 billion for the three‑month period, beating analysts’ expectations. Iger, who stepped down as CEO in 2020 after nearly two decades at the helm, was brought back after the board ousted his replacement, Bob Chapek, for failing to rein in costs and for centralizing power among a small group of executives with limited Hollywood experience.
Iger’s new tenure faces major headwinds, including a campaign by activist investor Nelson Petz, who demands further cost cuts after claiming Disney overpaid for the 20th Century Fox studio. Disney is also embroiled in a dispute with Florida Governor Ron DeSantis, who seeks to wrest control of the area around Walt Disney World, previously managed by the company. DeSantis, a potential presidential candidate, is angry at Disney for criticizing a state law banning school lessons on sexual orientation.
Disney+’s struggles come as rival Netflix has emerged from its own rough patch, announcing a solid boost in new subscribers at the end of last year. In an effort to curb costs, Netflix has begun cracking down on password sharing among its hundreds of millions of global subscribers, rolling out the policy in Canada, New Zealand, Portugal and Spain and planning a worldwide rollout.
Comments are closed for this story.