The first of what is anticipated to be 7,000 job cuts have already started at Walt Disney Co., marking the start of the company’s $5.5 billion savings drive that was first announced in February.
The first group of employees will be notified over the next four days, Chief Executive Officer Bob Iger said in a memo to staff on Monday. A second, larger round will happen in April, impacting several thousand workers. Before summer, the final group of impacted workers will be notified.
Iger, who returned to the company he supervised for 15 years in November, has outlined plans to enhance the financial performance of the largest entertainment company in the world. Making money from the company’s streaming TV companies, which lost more than $1 billion in the quarter that ended in December, is one of his concerns.
The business is getting rid of the organisational structure that gave distribution executives control over the company’s TV and movie businesses under Iger. He has handed additional autonomy to creative executives like Dana Walden, who controls the TV division, and Alan Bergman, who runs the film studios.
“For our employees who aren’t impacted, I want to acknowledge that there will no doubt be challenges ahead as we continue building the structures and functions that will enable us to be successful moving forward,” Iger said in the memo.
About $3 billion of the planned cost savings, according to Iger in February, will come from the company’s budget for movies and TV shows, with the remaining money coming from lower operating expenses. At the time, he stated that the savings initiative was already underway to the tune of $1 billion.
On Monday, Disney increased 1.6% to close at $95.62. 2022 saw a 44% fall in the stock, the second consecutive annual decline.
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