Disney has announced that it will cut 7,000 jobs to transform its business.
Announced by CEO Bob Iger, the job cuts takes a slice of 3% from the company’s media and entertainment global workforce.
The announcement happened after Disney reported its quarterly results. Its financials for the recent quarter topped Wall Street’s forecasts.
The layoffs are part of Disney’s broader effort to lower costs by $5.5 billion.
Iger reclaimed his CEO role in November last year after the company’s stock price dropped 24% in the hands of his successor Bob Chapek.
Disney is looking for ways to lure new subscribers to its Disney+ streaming service. It is facing fierce competition from Netflix, HBO, and others.
“In our zeal to go after subscribers, we got too aggressive in our promotions,” said Iger.
They want to “lean more into our core franchises and our brands” while also reducing costs “on everything we make.”
Disney billionaire investor Nelson Peltz is seeking a seat on its board of directors as part of a proxy fight against the company. Disney is urging its shareholders to vote against him.
Peltz is the CEO of Trian Partners. And the proxy vote is set for April 3.
As of October 2022, Disney has been employing 220,000 people. 166,000 of them are working in the U.S., while the rest are from abroad.
The solid growth at Disney’s theme parks has helped offset the weak performance of its video streaming and movie business.
Disney said Wednesday it earned $1.28 billion in the three months ending on Dec. 31. This is higher than the same period a year earlier at $1.1 billion
The company’s revenue grew 8% to $23.51 billion from $21.82 billion a year earlier. Analysts were expecting revenue of $23.44 billion.
Disney+ ended the quarter with 161.8 million subscribers—1 % less from Oct. 1. Its subsidiaries Hulu and ESPN+ had a 2% increase each in paid subscribers during the quarter.
“Since my return, I have drilled down into every facet of the streaming business to determine how to achieve both profitability and growth. And so with that goal in mind, we will focus even more on our core brands and franchises, which have consistently delivered higher returns,” Iger said in a call to discuss Disney’s latest earnings.
“We will aggressively curate our general entertainment content. We will reassess all markets we have launched in and also determine the right balance between global and local content. We’ll adjust our pricing strategy, including a full examination of our promotional strategies.”
Disney+ briefly topped Netflix last year in subscriber count.