March 28, 2023: Disney will start layoffs this week; the initial three rounds prior to the beginning of the summer resulted in about 7,000 job cuts, the memo sent by Chief Executive Bob Iger.
The slashes are part of a broader effort to decrease corporate spending and improve free cash flow. Disney said in the previous month it plans to slash $5.5 billion in costs, which include $3 billion in content spend.
“This week, we begin notifying workers whose positions are impacted by the company’s workforce decrease,” Iger wrote in the memo, which CNBC obtained. “Leaders will communicate the news directly to the first group of impacted employees over four days. A second, larger round of notifications will occur in April, with several thousand more staff reductions. We anticipate commencing the final round of notifications before the start of the summer to reach our 7,000-job target.”
The layoffs were initially announced. The job cuts will be cross-company, which hits Disney’s media and distribution parts, parks and resorts, and ESPN.
Disney has stated that its streaming business, led by Disney+, Hulu and ESPN+, will stop losing money in 2024. Disney follows the lead of Warner Bros. Discovery and different legacy media companies cutting jobs and spending. Disney shares are up nearly 8% this year after falling 44% last year.
“We have made the difficult talks to reduce our total workforce by approximately 7,000 jobs as part of a strategic setting of the company, including important cost-saving measures required for creating a more effective, coordinated and streamlined idea to our business,” Iger wrote.
“For our workers who aren’t impacted, I want to believe that there will no doubt be challenges ahead as we keep building the structures and functions that will allow us to be successful moving forward.”
Since returning as CEO, Iger has reorganized the company and acknowledged that he’d consider selling Hulu. Disney be hosting its annual shareholder meeting on April 3.