Disney will be cutting 7,000 jobs, or 3% of its workforce, globally as part of its multibillion-dollar cost-cutting plan.
“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 the company in November after Disney’s board fired Bob Chapek as the company’s chief executive.
"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."
While the company is laying off employees, it is planning to resume dividend payments to its shareholders after suspending them during the pandemic.
“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.”
Iger noted that the layoffs would result in $5.5 billion across the company, nearly half of which will come from “non-content” operations, including movies and television shows. He added that 50% of cost savings would come from marketing, 30% from labor, and 20% from reducing spend on technology, procurement, and other expenses, according to CNN.
The news comes just months after Disney reported better-than-expected results in Q4 2022, with its quarterly profit rising 8% to $23.5 billion, higher than the $23.4 billion analysts had predicted. The company reportedly benefited from robust revenue from its theme parks and a strong showing for box office movies such as Avatar.
Meanwhile, the company saw a 1% decline in the subscriber base of Disney+, while subscriptions for Hulu and ESPN+ grew by 2%. Despite the slight decline, the company has reaffirmed that Disney+ is on track to be profitable during its next fiscal year.
