Disney CEO Bob Iger Confirms Start Of Layoffs, With Three Rounds Of Cuts Expected Before Summer
Disney CEO Bob Iger has confirmed the first of three rounds of layoffs is starting this week as the company looks to reduce its workforce by about 7,000 employees.
The exec’s memo to employees (read it below) tracks closely with what Deadline exclusively reported last week — three rounds of cutbacks, with the second slated to be the deepest. This week’s initial round comes a few days before the company’s annual shareholder meeting on April 3. Iger first announced plans for the downsizing in February, describing it as a key to achieving $5.5 billion in cost savings. Managers have been finalizing details of the new structure during subsequent weeks.
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“In tough moments, we must always do what is required to ensure Disney can continue delivering exceptional entertainment to audiences and guests around the world – now, and long into the future,” Iger wrote in the memo.
Iger returned to the top job in November after stepping down in 2020 following a 14-year CEO stint. He faces a host of challenges in steering the media giant the second time around, including a more adverse macroeconomic climate and far greater Wall Street skepticism about the economics of streaming. He has already dismantled the centralized distribution structure implemented by former CEO Bob Chapek and set up three corporate divisions. It is expected that all three divisions – Parks, Experiences and Products; Entertainment; and ESPN will be part of the layoffs. The Entertainment division should see significant cuts on the business and content sides at Hulu as well as sister studios ABC Signature and 20th Television, sources have told Deadline.
The restructuring comes as the company evaluates a number of strategic options. While Iger has maintained that ESPN is likely to stay in the corporate fold, though it could offer a stand-alone streaming version in the not-too-distant future. Meanwhile, the CEO has indicated all scenarios are on the table for Hulu, which Disney operates but does not fully own. Comcast’s 33% financial stake can be bought out by Disney in early 2024, or Disney could decide to unload the streaming operation. An exit seems possible given Iger’s less-than-rosy commentary lately about the prospects for general-entertainment streaming.
The reduction in staff could be a tonic for Disney’s stock, at least in the short term. As with many media stocks over the past year-plus, Disney shares have hit hard times, losing about half their value since summer 2021. While the stock surged after Iger’s return, it has mostly moved sideways in recent months.
Here is Iger’s full memo:
Dear Fellow Employees,
As I shared with you in February, we have made the difficult decision to reduce our overall workforce by approximately 7,000 jobs as part of a strategic realignment of the company, including important cost-saving measures necessary for creating a more effective, coordinated and streamlined approach to our business. Over the past few months, senior leaders have been working closely with HR to assess their operational needs, and I want to give you an update on those efforts.
This week, we begin notifying employees whose positions are impacted by the company’s workforce reductions. Leaders will be communicating the news directly to the first group of impacted employees over the next four days. A second, larger round of notifications will happen in April with several thousand more staff reductions, and we expect to commence the final round of notifications before the beginning of the summer to reach our 7,000-job target.
The difficult reality of many colleagues and friends leaving Disney is not something we take lightly. This company is home to the most talented and dedicated employees in the world, and so many of you bring a lifelong passion for Disney to your work here. That’s part of what makes working at Disney so special. It also makes it all the more difficult to say goodbye to wonderful people we care about. I want to offer my sincere thanks and appreciation to every departing employee for your numerous contributions and your devotion to this beloved company.
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. I ask for your continued understanding and collaboration during this time.
In tough moments, we must always do what is required to ensure Disney can continue delivering exceptional entertainment to audiences and guests around the world – now, and long into the future. Please know that our HR partners and leaders are committed to creating a supportive and smooth process every step of the way.
I want to thank each of you again for all your many achievements here at The Walt Disney Company.
Sincerely,
Bob
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