The international movie organization, Walt Disney Co. announced a major restructuring on Wednesday, cutting 7,000 jobs as part of an effort to save $5.5 billion in costs and make its streaming business profitable.
The 7,000 job cuts will account for around 3.6 per cent of the entire workforce at Disney.
According to reports gathered, the restructuring, led by newly reinstated CEO Bob Iger, will result in a more cost-effective, coordinated approach to Disney’s operations, as the company shifts its focus to its core brands and franchises.
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Disney’s restructuring comes in response to slowing subscriber growth and increased competition for streaming viewers, as well as criticism from activist investor Nelson Peltz that the company was overspending on streaming.
Under the new plan, Disney will restructure into three segments: an entertainment unit that encompasses film, television and streaming, a sports-focused ESPN unit, and Disney parks, experiences and products. TV executive Dana Walden and film chief Alan Bergman will lead the entertainment division, while Jimmy Pitaro will continue to lead ESPN.
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According to a report by Reuters, this marks Disney’s third restructuring in five years and marks a new chapter in the leadership of Iger, who first became CEO in 2005. Iger, who returned to the role in November 2022, will now seek to put Disney’s streaming business on a path to growth and profitability, while restoring decision-making to the company’s creative leaders.
The layoffs come amidst a barrage of job cuts in the technology and media sector. The year started with some of the biggest companies in the world conducting unprecedented mass layoffs. Google laid off 12,000 employees and Amazon decided to let go of 18,000 employees.
