THE Walt Disney Co. will cut about 7,000 jobs as part of an ambitious companywide cost-savings plan and “strategic reorganization” announced Wednesday, Feb. 8, 2023, by chief executive officer (CEO) Bob Iger.
The job cuts amount to about three percent of the entertainment giant’s global workforce and was unveiled after Disney reported quarterly results that topped Wall Street’s forecasts.
Iger returned as CEO in November following a challenging two-year tenure by his handpicked successor, Bob Chapek. The company said the job reductions are part of a targeted US$5.5 billion cost savings across the company.
As of Oct. 1, Disney employed 220,000 people, of which about 166,000 worked in the U.S. and 54,000 internationally.
In a statement, Iger said Disney is embarking on a “significant transformation” that management believes will lead to improved profitability in 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 Wednesday that it earned $1.28 billion, or 70 cents per share, in the three months through Dec. 31. That compares with net income of $1.1 billion, or 60 cents per share, a year earlier.
Excluding one-time items, Disney earned 99 cents per share. Analysts, on average, were expecting adjusted earnings of 78 cents per share, according to FactSet.
Revenue grew eight percent to $23.51 billion from $21.82 billion a year earlier. Analysts were expecting revenue of $23.44 billion.
Disney said sales at its parks, experiences and products segment grew 21 percent to $8.74 billion, from $7.23 billion a year earlier, while revenue for the segment that includes Disney’s movie business edged up one percent to $14.78 billion from $14.59 billion a year earlier.
The company’s direct-to-consumer business, which includes its streaming services, posted a $1.1 billion operating loss amid higher programming and production costs at Disney+ and Hulu.
Disney+ ended the quarter with 161.8 million subscribers, down one percent from since Oct. 1. Hulu and ESPN+ each posted a two percent increase in paid subscribers during the quarter. (AP)