The Walt Disney Company has announced that it too will join the parade of large companies trimming their workforce in a round of layoffs. The Mouse House will part ways with many as 7,000 employees. That’s roughly 4% of the global work force.
As part of a larger restructure, the company aims to cut costs by as much as $5.5 billion while it struggles to find profitability at its streaming services and service the debt it acquired when purchasing 20th Century Fox.
Both of those efforts were spearheaded by Disney CEO Bob Iger before he left the company only to return after the replacement he appointed wasn’t up to the task.
A global restructuring
Iger had announced a new organizational structure would be coming after he came back to run the company. This change crucially moves ESPN and ESPN+, its streaming service, to it’s own unit. That could make it easier to sell off or spin off into its own company.
The restructuring also undoes the odd separation of content production and distribution (including streaming services). Iger will reunited the two into a single division.
The news came as part of the first quarter earnings for the Disney conglomerate. Revenues were up 8%, which exceeded Wall Street expectations.
“After a solid first quarter, we are embarking on a significant transformation, one that will maximize the potential of our world-class creative teams and our unparalleled brands and franchises,” said Iger in a statement. “We believe the work we are doing to reshape our company around creativity, while reducing expenses, will lead to sustained growth and profitability for our streaming business, better position us to weather future disruption and global economic challenges, and deliver value for our shareholders.”
Checking in on the domestic theme park division, which has been a cash cow for Disney even in the pandemic weakened economy, it saw a quarterly profit increase of 36% year over year for a tidy sum of $2.1 billion. International parks were a slight drag, but the entire Disney Parks, Experiences and Products saw operating income increase 25% to $3.1 billion.
The company highlighted increased guest spending growth driven by the arrival of Genie* and Lightning Lane. Also the cruise lines were sailing under increased occupancy numbers.
Bob Iger returned to lead the Walt Disney Company as CEO just a short while ago in November of 2022. He took the reins back from Bob Chapek who was fired by the Board of Directors after failing to handle internal financial matters appropriately.
We feel bad for any Disney employee who is laid off as part of this reorganization. Especially if the axe falls on any of the employees Disney asked to relocate to Orlando from California and then decided to delay moving others until at least 2026. There is a small silver lining. Unemployment in the United States is at a 52-year low and there is hiring going on in the market right now, but being laid off is always tough.