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Mouse is trying to clean the house.
That was the message clearly heard in Disney CEO Bob Iger’s first earnings report since he led the global entertainment company after retiring.
In a bombshell call with analysts, Iger announced a sweeping corporate restructuring. This will cost him nearly 7,000 layoffs to save $5.5 billion in costs. Job cuts account for approximately 3.6% of Disney’s global workforce.
“This is necessary to meet the challenges we face today, but I do not take this decision lightly,” said Iger. “I have tremendous respect and appreciation for the talent and dedication of our employees around the world, and I am mindful of the impact these changes will have on individuals.”
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Course correction is costly
House of Mouse is the latest U.S. company to join Google, Amazon, Facebook and Zoom to begin massive layoffs.
Iger said Disney hopes to revive its film and TV business while cutting “non-content” costs such as marketing, labor and technology.
“We need to bring creativity back to the heart of the company, increase accountability, improve results, and ensure the quality of content and experiences,” said Iger.
Iger said the company will be reorganized into three segments. His entertainment unit, which includes film, television and streaming, is an ESPN unit focused on sports, and Disney is his parks, experiences, and products.
He emphasized that the company’s streaming services, which include Disney+, ESPN+ and Hulu, remain “a top priority.” But he added, “As long as linear or traditional platforms can benefit us and our shareholders, we have no intention of abandoning them.”
Wall Street reaction
Disney employees can’t be happier with the news, but Wall Street likes what they hear as Disney shares surge 6% in aftermarket deals. has risen 26% this year.
Iger shared better quarterly P&L numbers than many analysts expected.
Disney’s streaming subscribers fell just 1% from 164 million to 162 million. However, ESPN+ and Hulu subscribers increased by 2%. Disney’s theme parks brought in $2.1 billion in profits, up 36% from last year.
The reorganization marks a new chapter for Iger, who became CEO of Disney in 2005, retired in 2020, and returned in 2022.
