Disney: Tech layoffs: Disney’s to cut 7,000 jobs as CEO restructures company – Times of India
Several tech companies across the world have announced layoffs in 2023. Not only small and mid-sized startups but tech majors like Amazon, Meta, Google, Microsoft and others have also significantly reduced their workforce. Most companies have cited that the unstable economy and Covid-19 pandemic tailwinds are forcing them to take up these cost-cutting decisions. Joining the fray, Walt Disney Co has also announced 7,000 job cuts.
Disney’s recently reinstated CEO Bob Iger is ‘restructuring’ the company with these layoffs. The entertainment conglomerate has described the latest job cuts as an effort to save $5.5 billion in costs and make its streaming business profitable. These layoffs represent an estimated 3.6% of Disney’s global workforce. However, the job announcement had a positive impact on the company’s share as it went up 4.7% to $117.22 in after-hours trading.
How investors have reacted to Disney’s move
Earlier, Disney was criticised by activist investor Nelson Peltz who said that the company was overspending on streaming. The latest move has addressed some of those criticisms. Disney has also promised to reinstate a dividend for shareholders.
According to a report by Reuters, in a statement, a spokesperson for Peltz’s Trian Group has expressed that the investment company is “pleased that Disney is listening.”
How the company is restructuring itself
Disney is planning to restructure the company to cut costs and return power to creative executives. The company plans to restructure itself into three segments — an entertainment unit (that encompasses film, television and streaming). a sports-focused ESPN unit and Disney parks, experiences and other products.
In a conference call with analysts, CEO Igor said that this reorganisation will result in a “more cost-effective, coordinated approach,” to Disney’s operations. He also claimed that the company is “committed to running efficiently, especially in a challenging environment.”
Moreover, Iger has also explained that the streaming business is still Disney’s top priority. He said that the company will focus more on its “core brands and franchises” and will “aggressively curate” its general entertainment content.
Disney’s recently reinstated CEO Bob Iger is ‘restructuring’ the company with these layoffs. The entertainment conglomerate has described the latest job cuts as an effort to save $5.5 billion in costs and make its streaming business profitable. These layoffs represent an estimated 3.6% of Disney’s global workforce. However, the job announcement had a positive impact on the company’s share as it went up 4.7% to $117.22 in after-hours trading.
How investors have reacted to Disney’s move
Earlier, Disney was criticised by activist investor Nelson Peltz who said that the company was overspending on streaming. The latest move has addressed some of those criticisms. Disney has also promised to reinstate a dividend for shareholders.
According to a report by Reuters, in a statement, a spokesperson for Peltz’s Trian Group has expressed that the investment company is “pleased that Disney is listening.”
How the company is restructuring itself
Disney is planning to restructure the company to cut costs and return power to creative executives. The company plans to restructure itself into three segments — an entertainment unit (that encompasses film, television and streaming). a sports-focused ESPN unit and Disney parks, experiences and other products.
In a conference call with analysts, CEO Igor said that this reorganisation will result in a “more cost-effective, coordinated approach,” to Disney’s operations. He also claimed that the company is “committed to running efficiently, especially in a challenging environment.”
Moreover, Iger has also explained that the streaming business is still Disney’s top priority. He said that the company will focus more on its “core brands and franchises” and will “aggressively curate” its general entertainment content.
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