Disney on Wednesday announced a sweeping corporate restructuring that will result in 7,000 people losing their jobs as part of an effort to achieve $5.5bn in cost savings.
The layoffs represent an estimated 3.6% of Disney’s global workforce, and come after major job cuts at other US giants including Alphabet, Amazon, Ford, Meta and others.
The media company, which is under pressure to turn a profit from its global streaming business, said it would reorganize into three segments: an entertainment unit that encompasses film, television and streaming; a sports-focused ESPN unit; and Disney parks, experiences and products.
The company said the restructuring would streamline operations, making its business more efficient, and reducing costs. Disney is the latest media company to announce job cuts in response to slowing subscriber growth and increased competition for streaming viewers. Disney earlier reported its first quarterly decrease in subscriptions for its Disney+ streaming media unit which lost more than $1 billion.
Warner Bros Discovery and Netflix previously underwent layoffs.
The last time Disney made cuts was during the height of the pandemic, when it announced in November 2020 that it would lay off 32,000 workers, primarily at its theme parks. The cuts took place in the first half of fiscal 2021.
Disney said it planned to cut $2.5bn in sales and general administrative expenses and other operating costs, an effort that is already under way. Another $3bn in savings would come from reductions in non-sports content, including the layoffs.
Chief executive Bob Iger outlined the cost-cutting plan to investors during the company’s fiscal first-quarter earnings call, in which Disney net income came in at $1.28bn, below analyst estimates of $1.43bn.
The reorganization marks a new chapter in the leadership of Iger, whose first tenure as chief executive began in 2005. He went on to fortify Disney with a roster of powerful entertainment brands, acquiring Pixar, Marvel and Lucasfilm. A decade later, Iger repositioned the company to capitalize on the streaming revolution, acquiring 21st Century Fox’s film and television assets in 2019 and launching the Disney+ streaming service that fall.
Iger stepped down as chief executive in 2020 but returned to the role in November 2022.