California: Walt Disney Co. has begun the first of what is expected to be 7,000 job cuts, a key part of a $5.5 billion savings drive the company announced in February.
The first group of employees will be notified over the next four days, CEO Bob Iger said in a memo to staff on Monday. A second, larger round will happen in April, impacting several thousand workers. The last of the affected workers will receive notice before summer.
Iger, who in November rejoined the company he led for 15 years, has laid out plans to improve the financial performance of the world’s largest entertainment company. Among his challenges, wringing profit from the company’s streaming TV businesses, which lost more than $1 billion in the quarter that ended in December.
Under Iger, the company is doing away with an organizational structure that put distribution executives over the company’s TV and movie businesses. He has given more power to creative leaders such as Dana Walden, who heads the TV business, and Alan Bergman, who runs the film studios.
The first round of job reductions included two senior vice presidents who led production at Hulu and the Freeform network, respectively. Their work will be consolidated in another part of the TV division. In addition, a unit that licensed books, podcasts and other stories for TV shows was dissolved.
The cuts are expected to fall on all parts of the company, including theme parks and the ESPN sports networks. Disney employed about 220,000 people worldwide as of October 1. Approximately 25 per cent are part-time or seasonal employees.
“For our employees who aren’t impacted, I want to acknowledge that there will no doubt be challenges ahead as we continue building the structures and functions that will enable us to be successful moving forward,” Iger said in the memo.
Iger said in February about $3 billion of the targeted cost savings would come from its budget for films and TV shows, and the rest from reductions in operating costs. About $1 billion of the savings effort was already underway, he said at the time.
Disney rose 1.6 per cent to close at $95.62 on Monday. The stock fell 44 per cent in 2022, the second straight annual decline.