Disney to fire 4,000 employees in second round: Here's why
Entertainment giant The Walt Disney Company is set to join the group of companies that laid off employees twice amid economic uncertainties. At least 4,000 people are at risk of losing their jobs next week. Disney Entertainment will be one of the most affected by this decision. Let's take a look at why the company decided to fire more employees.
Why does this story matter?
In November 2022, Bob Iger returned as Disney CEO. Iger is known for making the company an entertainment powerhouse during his first reign as CEO. The Disney he returned to was different, though. The company was facing challenges on various fronts, including poor financial performance and frosty relationships with actors and employees. He is now on a mission to revamp Disney.
Employees across TV, films, parks, and corporate will be affected
Disney's new round of layoffs will affect employees across film, TV, theme parks, and corporate positions. Every region where Disney operates will be affected by the job cuts. Diensy Entertainment, which was created this year, will see 15% of its staff fired. It houses the company's movie, TV production, and distribution business. The company will notify affected employees from April 24.
Disney plans to save $5.5 billion in annual costs
Disney, like many companies that axed employees, is terminating roles to reduce operating costs. The company first fired 7,000 staffers in February. The layoffs are part of the company's overall strategy to save $5.5 billion in annual costs. Considering the challenging economic environment, Disney and Iger see cutting down costs as a necessity. For all we know, there could be more layoffs later.
The company's streaming business is witnessing a slowdown
It's not just about reducing operating costs, though. The company's streaming business, now part of Disney Entertainment, is witnessing a slowdown. In the first quarter of fiscal 2023, Disney+, Hulu, and ESPN+ saw a slowdown in subscriber growth. Streaming still remains a priority for Disney, but it will focus on making the business more profitable by trimming the payroll and cutting content.
Disney will focus on franchises and well-recognized brands
A few would question why Disney is targeting its entertainment business. Especially considering it was created as part of the company's restructuring. Through the entertainment division, the company aims to promote franchise properties and well-recognized brands. This will lead to a reduction in content, which means fewer people will be required. The slowdown in subscriber growth certainly played a part in this.
Disney is cutting down general entertainment targeting adults
Disney's content cutting does not end there. It plans to reduce general entertainment targeting adults. As part of this, the company is thinking about what to do with Hulu, the service which specializes in general entertainment shows. We might see more layoffs targeting Hulu later. With increased competition in the streaming space, Disney will have to make drastic choices to challenge others.
