Joining a host of media companies announcing layoffs, Disney has stated that it would cut 7,000 jobs from its global workforce.
The move is a part of a multibillion-dollar cost-cutting initiative aimed at streamlining the company’s operations in a period of media industry turmoil, CNN Business reported. Disney had about 2,20,000 workers as of October 1, of which approximately 1,66,000 were in the US. A cut of 7,000 jobs translates into about 3 per cent of its global workforce.
“While this is necessary to address the challenges we’re facing today, I do not make this decision lightly,” said CEO Bob Iger, who returned to lead the company in November when the board fired Bob Chapek as the company’s leader. “I have enormous respect and appreciation for the talent and dedication of our employees worldwide, and I’m mindful of the personal impact of these changes.”
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After taking charge, Iger also initiated measures to reward shareholders, while Disney employees will feel pain from the job cut announcement, CNN Business report said. The company had suspended its dividend payments during the pandemic. These are expected to return now.
“Now that the pandemic impacts to our business are largely behind us, we intend to ask the board to approve the reinstatement of a dividend by the end of the calendar year,” he said. “Our cost-cutting initiatives will make this possible. And while initially, it will be a modest dividend, we hope to build upon it over time.”
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The job cuts come as part of a cost-cutting effort also announced Wednesday. According to CNN Business, the company said 50 per cent of the cost savings would come from marketing expenses, 30 per cent from labour savings and 20 per cent of the cost savings would come from less spending on technology, procurement and other expenses.
Since Disney is a major advertiser, a USD 1 billion reduction in annual marketing expenditures signals more difficulties ahead for other media, as well as tech companies.
The sweeping job cuts were announced by Iger after the company released better-than-expected financial results for the fourth quarter of 2022. According to CNN Business, Disney revenue in the quarter rose 8 per cent to USD 23.5 billion, edging past estimates of USD 23.4 billion from analysts surveyed by Refinitiv.