Disney will likely lay off employees as the entertainment goliath embarks on a cost-trimming project, part of a wave of job cuts hitting the media and tech industries.
A memo from CEO Bob Chapek, provided to PYMNTS, said Disney will also restrict all but essential work trips, and put a freeze on most new hires in addition to the layoffs.
The memo said a task force will examine content, administrative and marketing spending throughout the company and suggest cuts, adding that Disney senior management does “anticipate some staff reductions as part of this review.”
“I’m fully aware this will be a difficult process for many of you and your teams,” Chapek said in the memo. “We are going to have to make tough and uncomfortable decisions.”
The news came days after Disney reported $1.5 billion in quarterly losses for its streaming service, which has lost $8 billion in three years. The company also saw a 20% increase in paid subscribers in the U.S. and Canada and a 57% rise internationally in the last year.
In a news release last week, Chapek said the company will see its direct-to-consumer (D2C) losses narrow and that Disney+ will still reach profitability in fiscal year 2024, “assuming we do not see a meaningful shift in the economic climate.”
As PYMNTS has noted, streaming companies like Disney, Netflix, Amazon and Apple are all in competition for a dwindling number of viewers. PYMNTS research has found that the number of consumers subscribed to streaming services was at 63% in July, compared to 70% in May. The study also learned that streaming services gave up 10% of their subscriber base on average.
This week also saw Meta announce it was laying off 11,000 workers in the social networking giant’s first-ever round of wide-ranging job cuts. CEO Mark Zuckerberg had foreshadowed the move weeks earlier, saying the company planned to trim budgets for most of its teams.
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