Disney begins second round of layoffs; staff reductions to reach 4,000 this week
The week has arrived for Disney layoffs, Round 2.
Walt Disney Co. on Monday begins notifying more employees of layoffs, according to Disney officials, marking a second wave of job reductions that are part of a broader cost-cutting effort by the Burbank entertainment giant.
By Thursday, the company is expected to reach 4,000 of the 7,000 targeted staffing eliminations it promised investors earlier this year in a plan to save $5.5 billion.
Netflix said Tuesday that would end its DVD mailing service in September, marking the end of an era for the streamer as it evolves to compete with rivals.
Chief Executive Bob Iger in February disclosed the plan to streamline Disney’s business during a period of widespread economic uncertainty and Wall Street pressure on media firms to show paths to profitability for their costly streaming services.
For several years, analysts and investors cheered as legacy entertainment companies made massive bets on their own streaming services in order to take on Netflix. But the stock market soured on the streaming business during the last year, as Netflix’s growth plateaued.
Disney first began notifying employees of their fates on March 27. The first round of layoffs hit divisions including ABC News and the company’s unit focused on the so-called metaverse, or “next-generation storytelling,” a pet project of former CEO Bob Chapek.
Chapek was ousted by Disney’s board in November, clearing the way for Iger’s return after a previous 15-year run as CEO.
Disney CEO Bob Iger announced in February that the company would shed 7,000 jobs after losing billions on streaming. Layoffs begin this week.
The company had previously said a larger wave of job-slashing would come in April.
The company plans to begin a third round of pink slips before the beginning of the summer. Eliminations will be spread across the company’s divisions, including its film and TV studios and ESPN, as well as the parks, experiences and products segment.
Hourly parks employees are not expected to be affected.
Shortly after returning to Disney, Iger faced a proxy fight from billionaire activist investor Nelson Peltz, whose investment firm Trian Fund Management accumulated a $900-million stake in Disney and lobbied the company for a seat on its board of directors.
Peltz criticized the company for “self-inflicted” wounds, including poor succession planning and the costly acquisition of 21st Century Fox. Peltz ended his campaign shortly after Iger announced Disney’s cost-cutting plan.
As part of the first round of layoffs, Disney booted Marvel Entertainment Chairman Isaac Perlmutter, who’d long been a source of friction with Iger and who supported Peltz’s proxy fight.
