The first of three headcount reductions at Disney will begin this week, as announced by CEO Bob Iger on Monday.
Disney’s Decision to Begin Layoffs
Disney CEO Bob Iger revealed last month the company was planning to cut 7,000 jobs as part of a cost-cutting “strategic realignment.”
According to a memo obtained by The Hollywood Reporter, the layoffs will commence this week as the first of three rounds. The following month will see a “larger round of notifications,” with the final round scheduled “before the beginning of the summer.”
“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 told employees. “In tough moments, we must always do what is required to ensure Disney can continue delivering exceptional entertainment to audiences and guests around the world, now, and long into the future.”
Facing Financial Struggles
Disney shares rose 0.8% on Monday morning upon the release of the memo; the company’s stock price has declined 31.7% over the past year.
Iger commented that the layoffs would enable “important cost-saving measures necessary for creating a more effective, coordinated and streamlined approach” to the company.
He said last month during an earnings call that the firm’s new structure would center on “returning greater authority to our creative leaders and making them accountable for how their content performs financially,” according to another report from The Hollywood Reporter.
In the aftermath of the recession triggered by the pandemic, several companies ramped up their hiring but have now resorted to layoffs. Meta, the social media firm, and Amazon, the e-commerce giant, are among the prominent firms that have announced multiple job cuts.
Investors have pointed out the surge in the number of employees hired, with many being deemed surplus to requirements in the current economic climate.
The Battle Behind The Scenes
Disney has faced a loss of confidence from some customers following its involvement in controversial culture war debates last year. The company publicly opposed a Florida law related to parental rights that prohibits instruction on sexual orientation and gender identity to children between kindergarten and third grade.
Disney’s flagship streaming service, Disney+, experienced a considerable drop in new domestic subscriptions following entering into several political debates.
Several eyebrow raising movies have underperformed at the box office. For instance, “Strange World,” an animated film that features a teenage same-sex romance, failed to generate interest during a lucrative holiday weekend opening. Similarly, “Lightyear,” the newest addition to the popular “Toy Story” franchise, included a same-sex kiss and struggled to connect with audiences.
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