Disney to cut 7,000 jobs and slash $5.5 billion in costs as it unveils vast restructuring

[BumRushDaShow]

Source: CNBC

Disney said Wednesday it is planning to reorganize into three segments, while also cutting thousands of jobs and slashing costs. The media and entertainment giant said it would now be made up of three divisions:

Disney Entertainment, which includes most of its streaming and media operations

An ESPN division that includes the TV network and streaming service

A Parks, Experiences and Products unit

The move marks the most significant action Bob Iger has taken since returning to the company as CEO in November. Disney announced the changes minutes after it posted its most recent quarterly earnings. The announcements also come as Disney engages in a proxy fight with activist investor Nelson Peltz and his firm Trian Management. “We are pleased that Disney is listening,” a Trian spokesperson said Wednesday.

On Wednesday, during its quarterly earnings call with investors, Disney also announced it would be cutting $5.5 billion in costs, which will be made up of $3 billion from content, excluding sports, and the remaining $2.5 billion from non-content cuts. Disney executives said about $1 billion in cost cutting was already underway since last quarter.

Read more: https://www.cnbc.com/2023/02/08/disney-reorganization.html

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Article updated.

Previous articles/headline -

Disney to cut 7,000 jobs as it slashes costs and reorganizes

Disney said Wednesday it is planning to reorganize into three segments, while also cutting thousands of jobs and slashing costs. The media and entertainment giant said it would now be made up of three divisions:

Disney Entertainment, which includes most of its streaming and media operations

An ESPN division that includes the TV network and streaming service

A Parks, Experiences and Products unit

The move marks the most significant action Bob Iger has taken since returning to the company as CEO in November. Disney announced the changes minutes after it posted its most recent quarterly earnings.

On Wednesday, during its quarterly earnings call with investors, Disney also announced it would be cutting $5.5 billion costs, which will be made up of $3 billion from content, excluding sports, and the remaining $2.5 billion from non-content cuts. Disney executives said about $1 billion in cost cutting was already underway since last quarter. Disney also said it would be eliminating 7,000 jobs from its workforce. That would be about 3% of the roughly 220,0000 people it employed as of Oct. 1, according to an SEC filing, with roughly 166,000 in the U.S. and about 54,000 internationally.

Original article -

Disney said Wednesday it is planning to reorganize into three segments. The media and entertainment giant said it would now be made up of three divisions:

Disney Entertainment, which includes most of its streaming and media operations

An ESPN division that includes the TV network and streaming service

A Parks, Experiences and Products unit

The move marks the most significant action Bob Iger has taken since returning to the company as CEO in November. Disney announced the changes minutes after it posted its most recent quarterly earnings. On Wednesday during its quarterly earnings call with investors, Disney also announced it would be cutting $5.5 billion costs, which will be made up of $3 billion from content, excluding sports, and the remaining $2.5 billion from non-content cuts.

Disney also said it would be eliminating 7,000 jobs from its workforce. That would be about 3% of the roughly 220,0000 people it employed as of Oct. 1, according to an SEC filing, with roughly 166,000 in the U.S. and about 54,000 internationally.


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[BlueWaveNeverEnd]

1. in Florida?

[RKP5637]

2. ... as Disney moves to a better place than FloriDUH. n/t

[onenote]

5. Probably only a few, if any, Florida jobs impacted

The streaming services part of the company is headquartered in New York, with media division employees in California.
ESPN is headquartered in Connecticut.
The parks division is split between Florida and California.

[GB_RN]

14. There Are Parks Elsewhere, Too...

This is a list of the top Disney parks worldwide:

Disneyland Anaheim, California.
Walt Disney World, Orlando.
Disneyland Paris, France.
Tokyo Disneyland and Disney Sea, Japan.
Hong Kong Disneyland.
Shanghai Disney Resort, China.
Aulani -A Disney Resort & Spa, Hawaii.

Then there's also the Disney Cruise Line, which would probably fall under the parks division.

[Auggie]

3. From the link: Disney's stock rose more than 8% in after-market trading

The happiest place on Earth for investors. For employees, not so much ...

[RKP5637]

4. Imagine, working for a place that DeSantis has his claws into! n/t

[Auggie]

7. It would take some real imagineering for that

I have no intention to ever step foot in Florida again ... unless it's a layover at the airport.

[RKP5637]

8. Excellent idea!!! I think many others will do the same. n/t

[crimycarny]

6. I remember this Disney "reorganization"

https://www.hollywoodreporter.com/business/business-news/disney-world-replaces-250-tech-800303/

Same thing happened at my place of work. Over 200 IT employees were laid off and their compensation package was tied to training their replacements, all offshore. I don't blame the replacements, I blame the greedy executives.

I say if the company is doing so poorly that large layoffs are required, maybe it's the executives who need to be replaced...

[RKP5637]

9. K&R !!!!!!!! n/t

[DBoon]

11. after all, if the company does well the executives get rewarded

executives need to experience the downside risk too

[JustABozoOnThisBus]

21. If a large corporation does poorly, the executives still get rewarded.

Our CEO creatively threw some mid-level managers under the bus, blamed the losses on a one-time accounting adjustment, and received stock options.

I could say that about three corporations I worked for.

It's good to be retired.

[MichMan]

15. It's 3 percent of the total workforce at Disney

[Algernon Moncrieff]

12. My guess is they will look to sell ESPN

Sports is so increasingly focused on gambling now that I don't think it's a business they want to be in. Organizationally, they are going to want to refocus on getting back to making quality films and figuring out how to best market that product in the new post-pandemic streaming environment. Their first priority is going to be making Disney + solvent.

DeSantis is banking on the not wholly unreasonable supposition that Disney is too invested in Walt Disney World to do anything but shut up and deal with whatever policies he sees fit to put forth. In the short term, that's probably true. And the reality is that the leadership at Disney historically has been relatively politically conservative. However, Disney was in Florida before DeSantis and will be there after he is gone, and politics is a long game. I suspect Disney, corporately, will get more indirectly involved in PAC money to influence Florida politics. Failing that, I suspect that they may reconsider the long run prospects of further expansion of the Florida parks (they have 4 parks now and are thought to have room for at least 3 more). If the political climate in Florida continues to run badly for them, Louisiana (it was the first place Walt considered for Disney World), Texas, or Mexico could all be places Disney considers.

The other issue Disney may have to deal with is the two parks in China. Hong Kong made sense when people still believed in One nation/Two Systems, but now that Beijing has assimilated (or at least attempted) Hong Kong, and since Disney also built in Shanghai, they may have serious problems. My understanding is that Hong Kong became far less profitable after Shanghai opened (obviously both lost money during the pandemic). The deteriorating relations between the US and China also don't bode well for parks so readily identified with America.

Finally, big issues are starting to come along with Disney's copyrights. In the 90s I believe, Disney got the length of a copyright extended to 100 years. The 2020s are marking the beginning of the expirations of those copyrights, and that will accelerate in the 2030s. It seems unlikely that the feds will further extend copyrights, but I've been wrong before.

[BumRushDaShow]

13. Disney gobbled up

-Pixar
-20th/21st Century Fox (including the entire Star Wars franchise)
-Marvel (and it's entire franchise)
-Discovery/National Geographic
-Hulu

So they have quite a bit outside of their "broadcast" and "theme park" biz.

[Buckeyeblue]

18. ESPN is a tough one for sure

Aside from the cost of getting the rights to the games, producing sporting events is relatively cheap. And ESPN has a hand in all the big pro and college sports. As much as this is the square peg in the round circle, it might be worth too much to sell. I'm not sure who could actually buy ESPN.

But you are right that as gambling continues to grow that's what a sports network like ESPN is going to have to cater to. That doesn't seem like the Disney brand.

[James48]

16. Amazing timing.

Considering 32,000 Disney Florida employed just REJECTED a contract offer two days ago.

96% of employees rejected the Disney offer.

So the employer announces thousands of layoffs?
Union busting 101.

https://www.wdwinfo.com/news-stories/new-contract-offer-rejected-by-walt-disney-world-workers/

[machoneman]

17. Would love to see Disney totally shutdown in FL. Sure, many employees, vendors, etc, hurt yet many..

..would find jobs elsewhere.

Sticking it to DeSatan and the FL R's would be sweet justice. Ain't gonna happen but one can dream, right?

[Initech]

19. Yes. Ron DeSantis can go shove his Fox News anti-woke agenda up his ass.

And Fox News can go shove it up their ass too.

[twodogsbarking]

20. Payback for employees wanting a living wage. See how it works?