Representing 3.6% of the global workforce, Disney’s layoff move is expected to reduce company expenses worth about US$5.5 billion.
Heaptalk, Jakarta — On Wednesday (02/08), Walt Disney Company declared a massive restructuring, impacting a job-cutting resolution on its 7,000 workforces globally. Representing about 3.6% of the total employees, this layoff determination is a part of the company’s effort to reduce expenses due to subscriber growth slowdown amidst an increased rival for the streaming platforms.
“I extremely appreciate the earnest dedication of our global employees. Also, I carefully consider the impact caused by our performed layoff steps. As we know, we have recovered our business continuity from the Covid-19 pandemic era. For this reason, we also intend to ask the board to approve the distribution of year-end dividends. ” the Chief Executive Officer of Disney, Bob Iger, said, cited in CNN.
Apart from completing a layoff move, Disney also intends to cut US$5.5 billion in expenses, consisting of US$ billion in sales and general administrative costs and other operating expenses, as well as another US$3 billion in savings from non-sport content diminishment.
The massive termination step was announced after the company disclosed its better financial output for the fourth quarter of 2022. As recorded by the team, Disney’s revenue has evolved by 8%, attaining US$23.5 billion, exceeding the analyst forecast of US$23.4 billion. However, the net income of the Walt Disney Company has only reached US$1,279 billion, beneath the analyst’s estimation.
On the other hand, for the fiscal quarter that ended on December 31st, this mass media company reported adjusted incomes per share of 99 cents, upper the analyst prediction of 78 cents, according to the Revinitiv data.
“This reorganization step will engender a more provident and well-coordinated approach to our business operations. Thus, we emphasized working efficiently amidst these challenging times. Besides, we will also prioritize our streaming services, focus on our core brands and franchises, and release our entertainment content aggressively,” added Iger.
As information, this workforce reduction step marked Disney’s third restructuring process in five years. In 2018, this company reorganized its business to expedite the enhancement of its streaming business unit and conducted a similar move in 2020.
The last restructuring step that impacted the layoff decision was forced to be done as the spike in Covid-19 cases in 2020. As an effect, around 32,000 employees, particularly in the theme parks business unit, were laid off in the first half of 2021.
