Disney to Begin 7,000 Job Layoffs this Week

Disney CEO Bob Iger sent a memo this week announcing that Disney will begin layoffs this week, the first of three rounds before the start of the summer that will result in about 7,000 job cuts, which are to be carried out before the end of the summer.

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The changes are part of a bigger initiative to minimize corporate costs and increase free cash flow. In addition to cutting $5.5 billion in costs, Disney announced last month that it will also save $3 billion on content.

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“We are starting to notify employees whose positions are affected by the company's workforce reductions this week,” Iger wrote in a memo obtained by Trade Algo. “Over the next four days, leaders will communicate the news directly to the first group of impacted employees. The second, larger round of notifications will take place in April with several thousand more staff reductions. The final round is expected to take place by the beginning of summer to achieve our 7,000-job reduction goal."

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The layoffs were announced in February. The company-wide layoffs will affect ESPN, Disney's parks and resorts, and its media and distribution operations.

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Disney is adopting Warner Bros.' strategy. Cutting employment and spending are Discovery and other established media businesses. According to Disney, its streaming division, which is dominated by Disney+, Hulu, and ESPN+, will stop losing money in 2024. After declining 44% last year, Disney stock is up around 8% this year.

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"As part of a strategic restructuring of the company, including significant cost-saving measures necessary for building a more effective, integrated, and streamlined approach to our business, we have decided to decrease our entire staff by about 7,000 jobs,” Iger wrote on the memo. "For those of our colleagues who are unaffected, I want to acknowledge that there will undoubtedly be difficulties as we continue to develop the systems and processes that will allow us to succeed going forward."

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Iger has overhauled the business since taking over as CEO and said he would think about selling Hulu. Disney's annual shareholder meeting will take place on April 3.