Disney layoffs: Entertainment giant The Walt Disney Company will cut around 7,000 jobs as part of an ambitious companywide cost-savings plan and strategic restructuring, Chief Executive Officer Bob Iger announced on Wednesday (Feb 8).
The job cuts amount to about 3 percent of the entertainment giant’s global workforce and were unveiled after Disney reported quarterly results that topped Wall Street forecasts.
Iger returns as CEO in November 2022 after a challenging two-year stint by his chosen successor, Bob Chapek. The company said the job cuts are part of $5.5 billion in cost savings targeted across the company. As of October 1, Disney employed 220,000 people, of whom approximately 166,000 worked in the United States and 54,000 internationally.
In a statement, Iger said Disney is embarking on a “significant transformation” that management believes will lead to improved profitability in the company’s streaming business.
The company, which owns Star Wars, Marvel and Pixar, will focus more on its core brands and franchises, Iger said. The executive also announced changes to how executives would run Disney’s various divisions. Specifically, creative executives will now be responsible for determining which movies, TV series or other content to produce, as well as marketing and distribution.
“Our new structure aims to return greater authority to our creative leaders and hold them accountable for the financial performance of their content,” Iger said during a call with Wall Street analysts.
In its latest results, solid growth at Disney’s theme parks helped offset weak performance in its video streaming and movie business.
disney earnings,
Disney said Wednesday that it earned $1.28 billion, or 70 cents per share, in the three months through December 31. That compared with net income of $1.1 billion, or 60 cents per share, a year earlier.
Excluding one-time items, Disney earned 99 cents per share. Analysts, on average, were expecting adjusted earnings of 78 cents per share, according to FactSet. Revenue rose 8 percent to $23.51 billion from $21.82 billion a year ago. Analysts were expecting revenue of $23.44 billion.
Disney Sales:
Disney said sales in its parks, experiences and products segment rose 21% to $8.74 billion from $7.23 billion a year earlier. While revenue for the segment containing Disney’s movie business rose 1% to $14.78 billion from $14.59 billion a year ago.
The company’s direct-to-consumer business, which includes its streaming services, reported an operating loss of $1.1 billion amid higher programming and production costs at Disney+ and Hulu.
Disney+ ended the quarter with 161.8 million subscribers, down 1% from October 1. Hulu and ESPN+ each reported 2% growth in paid subscribers during the quarter.
The company introduced new price tiers for its US Disney+ service in December, raising the monthly price for ad-free viewing from $7.99 to $10.99 and creating a new basic Disney+ service with ads that costs $7.99. It was per month.
disney+ business,
Management said on Wednesday that Disney+ Plus would achieve profitability by the end of its next fiscal year in September 2024. The latest results marked a snapshot of the first quarter following Iger’s return as CEO. The move to revitalize the company and cut costs came as Disney was under pressure to turn around its business.
Activist investor Nelson Peltz, CEO of Trian Fund Management, is vying for a seat on Disney’s board of directors, arguing that the company’s recent operating performance has been disappointing and that self-division problems stemmed from failed succession planning efforts. The result is a flawed direct-to-consumer strategy and “over-the-top” compensation practices, among other concerns.
Disney has urged shareholders to vote against Peltz and last month named board member Mark Parker as its chairman. Parker, who also serves as executive chairman at Nike Inc., has been named head of Disney’s newly created succession planning committee, which will advise the board on CEO succession planning.
Iger also announced that he intends to ask the board to approve the reinstatement of the nominal dividend by the end of this year. The company suspended its dividend in the spring of 2020 in the early days of the pandemic.
Shares of Disney, which is based in Burbank, California, rose about 6 percent in after-hours trading.
(with inputs from agencies)
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