The Walt Disney Company will lay off thousands of employees as part of a new round of cost-cutting measures, CEO Bob Iger revealed today.
Speaking on House of Mouse’s Q1 earnings call this afternoon with CFO Christine McCarthy, Iger said 7,000 jobs will be cut from the now 100-year-old company. “I have great respect and admiration for the dedication of our employees worldwide,” Iger said, adding that he did not take the cuts lightly.
Larger than expected, the layoffs will span almost the entire Disney empire.
However, while domestic employees will be hit the hardest, the cuts will be fairly mild in the company’s thriving parks and resorts division. No stranger to job losses in a variety of contexts over the past three years, Disney has around 220,000 workers worldwide – which would see just over 3% of the company affected by today’s cuts.
Full of announced new structures and “significant transformations,” to quote Iger himself today, Wednesday’s strong-ish quarterly earnings were the first since the former long-serving CEO became CEO again late last year.
Hastily taking back the reigns, Iger told a Nov. 22, 2022 town hall that he superseded his newly pink-slipped predecessor, Bob Chapek, appointed weeks earlier to stem the financial bleeding. In a Nov. 11 memo to Disney executives, Chapek also said job cuts were coming down the line — an end game that came today.
This latest round also comes more than two months after the 71-year-old Iger suddenly returned as Disney CEO, intended in no small part to get a rise out of Wall Street and defuse corporate strife. A recent history lesson and before going into the guts of restructuring Greatest Hits at the top of the call, $5.5 billion in savings and the pride of Disney Entertainment co-chairs Dana Walden and Aland Bergman, a soft-spoken Iger emphasized profit and creativity as his answer.
For all of Reset’s promises, the only major personnel move he’s made since starting his second stint in the Corner Office was the firing of Kareem Daniels, who headed Disney Media and Entertainment Distribution. Iger had long loathed the centralized structure of DMED, hand-picked and put in place by short-lived successor Chopek, and made it clear that dismantling it would be a cornerstone of his strategy.
Under attack from within and without since he took office in early 2020, Chapek was finally removed and ousted on the night of November 20, 2022.
It comes just days after a near-trainwreck in an earnings call in which the company reported a $1.5 billion quarterly loss in its streaming business, issued weaker guidance and raised doubts on Wall Street about its forecast for profits in streaming through the fall of 2024.
In addition to trying to resolve the company’s financial woes, Iger is also grappling with a potentially messy proxy battle.
Nelson Peltz, an activist investor who held a small stake in the company, claimed a seat on the board of directors. Backed by Pal and former Marvel boss Ike Perlmutter, Peltz charged that Disney’s stock had underperformed because of heavy investments in its intellectual property arsenal and deals like the $71.3 billion acquisition of most of 21st Century Fox. Rejected by both Chapek and Iger in his quest for a seat at the big table, Peltz has come under public attack in his increasingly long-shot but corrosive campaign.
The showdown will ultimately come at Disney’s annual shareholder meeting, the site of the vote on board candidates. On the event horizon for today’s earnings and announcement, that meeting will virtually take place in early April.