Los Angeles The US media and entertainment group Walt Disney wants to reposition itself and cut around 7,000 jobs. That corresponds to almost four percent of the workforce. The company announced the layoffs Wednesday as part of a wide-ranging restructuring expected to result in $5.5 billion in cost savings. With its global streaming business, Walt Disney faces fierce competition from rivals such as Netflix and Amazon, and is making losses there. Disney shares are up more than 9 percent in after-hours trading.
Disney CEO Bob Iger announced a reorganization into three segments: an entertainment division, which includes film, television and streaming, a sports-focused unit, and the Disney Parks, Experiences and Products division. The restructuring will streamline processes, make the business more efficient and reduce costs, it said. Most recently, Disney laid off 32,000 employees during the corona pandemic, mainly in theme parks.
Disney now follows other media companies that have also announced job cuts in response to slowing subscriber growth and increasing competition for streaming viewers. On Wednesday, the group reported a decline in the number of subscribers for its Disney+ streaming division for the first time in a quarter. It lost more than a billion dollars. The company is now expected to save $2.5 billion in selling, operating and general administrative expenses, with an additional $3 billion in savings from layoffs and cuts in non-sports content.
In the past quarter, Disney’s net income rose 11 percent to just under $1.28 billion, below analyst estimates of $1.429 billion. Sales climbed eight percent to $23.51 billion, higher than expected.
The restructuring marks a new chapter under CEO Iger, whose first term in office began in 2005. He bolstered Disney with a number of entertainment brands, acquiring Pixar Animation Studios, Marvel Entertainment and Lucasfilm. Years later, he repositioned the company to capitalize on the streaming run, buying 21st Century Fox’s film and television operations and launching Disney+. He stepped down as boss in 2020 but came out of retirement in November 2022. With the new structure, decisions are to be placed back in the hands of creative minds, who then decide which films and series are produced and how they are distributed and marketed.
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