Disney reached its 7,000 layoffs goal, handing out notices to the remaining employees impacted in its third round of job cuts last Friday ahead of the Memorial Day holiday weekend, Variety has confirmed.
The Mouse House’s target was to conclude these companywide layoffs, which focused most heavily on the media divisions and left the parks largely untouched, ahead of the summer.
The company still has plans to eliminate more roles internationally over a period of time, according to a source close to the situation, but Disney has now concluded the benchmark it set in February, soon after Iger’s return as CEO upon the ousting of Bob Chapek.
Iger announced a sweeping a cost-cutting strategy, with the first round of staff reductions begun March 27. The second wave, which brought Disney’s total to 4,000 cuts, hit the week of April 24, and the third and final concluded May 26.
The 7,000 layoffs — which represent 3.2% of Disney’s total headcount of about 220,000 worldwide as of Oct. 1, 2022 — are part of Disney’s efforts to achieve about $5.5 billion in cost savings. Of that, $2.5 billion represents “non-content costs” (including labor costs) and $1 billion of those targeted cost-reductions were already underway in February,Iger said. Disney is aiming for an annualized reduction of $3 billion in non-sports content costs, expected to be realized over the next several years.
The cuts come amid the ongoing Writers Guild of America (WGA) strike and Disney’s move to pull content from its streaming platforms, and following Disney’s reorg into three core business segments: Disney Entertainment, headed by co-chairs Dana Walden and Alan Bergman; ESPN, led by Jimmy Pitaro; Disney Parks, Experiences and Products, led by Josh D’Amaro.
As an industry expert with a deep understanding of the dynamics within the entertainment and media sector, I can provide insights into the recent developments at Disney. My knowledge spans various aspects of the industry, including corporate strategies, financial goals, and organizational restructuring.
The recent article highlights Disney's successful achievement of its goal to lay off 7,000 employees, a process that unfolded across three rounds of job cuts. The focus of these layoffs was primarily on the media divisions, sparing the parks for the most part. This strategic move was executed ahead of the summer, aligning with the company's broader cost-cutting strategy announced by CEO Bob Iger.
Iger's return as CEO marked a significant period of change for Disney. In February, he introduced a comprehensive cost-cutting strategy aiming to achieve approximately $5.5 billion in savings. The layoffs, totaling 3.2% of Disney's global workforce, were a crucial component of this strategy. The targeted cost reductions included both "non-content costs," such as labor costs, and specific initiatives underway since February.
To break down the financial objectives further, Disney aimed for $2.5 billion in savings from "non-content costs," with $1 billion of these reductions already in progress by February. The company is striving for an annualized reduction of $3 billion in non-sports content costs, with the expectation that these savings will materialize over the next several years.
These organizational changes occurred in the backdrop of the ongoing Writers Guild of America (WGA) strike and Disney's decision to withdraw content from its streaming platforms. Additionally, Disney underwent a reorganization into three core business segments: Disney Entertainment, ESPN, and Disney Parks, Experiences, and Products. Each segment is now headed by key executives, emphasizing a more focused and streamlined approach to business operations.
In summary, Disney's recent actions reflect a strategic response to economic challenges, industry shifts, and the company's commitment to achieving substantial cost savings while adapting to the evolving landscape of entertainment and media.
