Entertainment giant Walt Disney Co on Wednesday said it plans to lay off 7,000 employees, as CEO Bob Iger announced a reorganization of the company he returned to lead last year.
The job cuts follow similar moves by US tech giants dialing back from a hiring spurt that began during the height of the COVID-19 pandemic.
“I do not make this decision lightly,” Iger said on a call to analysts after Disney posted its latest quarterly earnings.
Photo: AFP
In its 2021 annual report, the group said it employed 190,000 people worldwide, 80 percent of whom were full-time.
“We are going to take a really hard look at the costs for everything that we make, both across television and film,” Iger said. “Because things in a very competitive world have just simply gotten more expensive.”
Disney said its streaming service saw its first ever fall in subscribers last quarter as consumers cut back on spending.
Subscribers to Disney+, a streaming rival to Netflix, fell 1 percent to 161.8 million customers on Dec. 31, compared to three months earlier.
Disney is going to look at the volume of content it makes and the pricing of its streaming services, Iger told analysts.
“We were in a global arms race for subscribers,” Iger said. “I think we might have gotten a bit too aggressive in terms of our promotion, and we are going to take a look at that.”
Disney remains devoted to blockbuster franchises that include recent Marvel super hero film Black Panther: Wakanda Forever, and has sequels in the works to hit animation films Frozen and Zootopia, Iger said.
It is too soon to know whether the layoffs and corporate restructuring might appease critics and set Disney on more solid footing, analysts said.
Across a vast entertainment empire that includes theme parks, film studios and cruise ships, the Disney Group drew revenues of US$23.5 billion for the three month period, better than analysts predicted.
Iger’s new assignment as CEO is facing major headwinds, including a campaign by activist investor Nelson Petz, who is demanding major cost-cutting after he said Disney overpaid to buy the 20th Century Fox Inc movie studio.
Disney is also caught in a spat with Florida Governor Ron DeSantis, who is looking to wrest back control of the area around Walt Disney World that has until now been controlled by the entertainment giant.
The politically conservative DeSantis, who is tipped as a possible US presidential candidate, is furious at Disney for criticizing a state law banning school lessons on sexual orientation.
Meanwhile, in its own effort to rein back costs, Netflix has begun a campaign to stop password sharing among its hundreds of millions of global subscribers.
On Wednesday, Netflix revealed it had begun to crack down on password sharing in Canada, New Zealand, Portugal and Spain as it continues to roll out its new policy worldwide.
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