Bob Iger, CEO, Disney, during CNBC interview, Feb. 9, 2023.
Randy Shropshire | CNBC
Disney began its second, larger wave of layoffs Monday, bringing total job cuts in recent weeks to 4,000 when the latest round is completed.
Earlier this year, Disney said it would slash 7,000 jobs from its workforce as part of a larger reorganization of the company that will see it cut costs by $5.5 billion. The announcement was made during Bob Iger’s first earnings call since returning as CEO.
Disney officials said Monday that they don’t take the departure of so many colleagues lightly. Eliminating 7,000 jobs from its workforce equates to about 3% of the roughly 220,000 people Disney employed as of Oct. 1, according to a securities filing, with roughly 166,000 in the U.S. and about 54,000 internationally.
Disney notified employees of a first wave of layoffs on March 27, which saw cuts in its metaverse strategies unit and part of its Beijing office.
The second round, which will be completed Thursday, will affect various divisions across the company, including Disney Entertainment and ESPN, as well as Disney Parks, Experiences and Products. The jobs affected will span across the country from Burbank, California, to New York and Connecticut. CNBC reported last week layoffs would soon commence at ESPN.
ESPN is first eliminating off-camera employees in the three rounds of cuts and will do a separate talent evaluation over the summer, which will conclude in additional cuts and non-renewals of contracts, one of said a person familiar with the matter. ESPN is eliminating less than 100 jobs in this round, the person said.
“As we advance as a core segment of Disney, with operational control and financial responsibility, we must further identify ways to be efficient and nimble,” ESPN CEO Jimmy Pitaro wrote in a note to employees obtained by CNBC. “We will act with compassion, respect for our colleagues, and professionalism as we face these hard circumstances.”
Disney said it expects to start its third wave of layoffs before the beginning of the summer in order to reach the 7,000 target. Disney has previously said it doesn’t expect layoffs to affect its hourly workers at its parks and resorts.
Iger said earlier this year Disney’s cost reductions would include cutting $3 billion in content expenses, excluding sports, and the remaining $2.5 billion from noncontent cuts. At that point, Disney executives said about $1 billion in cost-cutting had already been underway since last quarter.
The cost-cutting measures at Disney come as media companies have been pulling back on content spending — and spending in general — as they look to make their streaming businesses profitable. The reorganization was also put into place when Disney was still in the midst of a proxy fight with Nelson Peltz and his firm Trian Management. Soon after the announcement, Peltz called off his proxy war.
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