.Entertainment giant Disney is laying off 7,000 employees to cut costs.
· As of October 1, Disney employed 220,000 people, of which about 1,66,000 in the United States and 54,000 internationally.
· Disney is embarking on a “significant transformation” that management believes will lead to improved profitability at the company’s streaming business.
· Disney earned $1.28 billion, or 70 cents per share, in the three months through December 31.
· The CEO announced that he intends to ask the board to approve the reinstatement of a modest dividend by the end of this year.
Entertainment giant The Walt Disney Company will cut around 7,000 jobs as part of companywide cost-savings plan and strategic reorganization announced on Wednesday (February 8) by Chief Executive Officer Bob Iger. The job cuts amount to about 3 percent of the entertainment giant’s global workforce and were unveiled after Disney reported quarterly results that topped Wall Street’s forecasts.
The company said the job reductions are part of a targeted $5.5 billion cost savings across the company. As of October 1, Disney employed 220,000 people, of which about 1,66,000 worked in the United States and 54,000 internationally.
In a statement, Iger said Disney is embarking on a “significant transformation” that management believes will lead to improved profitability at the company’s streaming business. The company, which owns Star Wars, Marvel and Pixar, will focus more on its core brands and franchises, Iger said. The executive also announced changes to how executives will operate Disney’s various divisions. Specifically, creative executives will now be responsible for determining what movies, TV series or other content to produce, as well as the marketing and distribution.
“Our new structure is aimed at returning greater authority to our creative leaders and making them accountable for how their content performs financially,” Iger said during a call with Wall Street analysts.
In its latest results, solid growth at Disney’s theme parks helped offset tepid performance in its video streaming and movie business.
Disney said that it earned $1.28 billion, or 70 cents per share, in the three months through December 31. That compares with net income of $1.1 billion, or 60 cents per share, a year earlier.
Disney said sales at its parks, experiences and products segment grew 21% to $8.74 billion, from $7.23 billion a year earlier. While revenue for the segment that includes Disney’s movie business edged up 1% to $14.78 billion from $14.59 billion a year earlier.
Management said on Wednesday that Disney+ plus will achieve profitability by the end of its next fiscal year in September 2024. The latest results marked the first quarterly snapshot since Iger’s return as CEO.
Iger also announced that he intends to ask the board to approve the reinstatement of a modest dividend by the end of this year. The company suspended its dividend in the spring of 2020, in the early days of the pandemic.
