>
BREAKING NEWS: Disney’s Bob Iger to lay off 7,000 workers as company cuts costs, despite beating profit expectations and revenue grows to $23.51 billion in 2022 as Ron DeSantis takes control of his Florida Reedy Creek Improvement District
- Bob Iger plans to lay off about 7,000 employees to cut costs
- He announced plans Wednesday to restructure the company and eliminate a division created by his predecessor Bob Chapek.
- The move comes as Florida Gov. Ron DeSantis seizes control of his Reedy Creek Improvement District.
Disney’s Bob Iger plans to lay off 7,000 employees in a “significant transformation” to cut costs while eliminating some of his predecessor’s efforts.
On Wednesday, Iger announced his plans to restructure the company, effectively eliminating the Disney Media and Entertainment Distribution group created by former chief executive Bob Chapek.
The new structure, according to the hollywood reporter, will have only three divisions, Disney Entertainment, which will include film and television assets, as well as Disney +; ESPN, which will include ESPN and ESPN+; and Parks, Experiences and Products, which will include theme parks and the consumer products team.
As part of that change, Disney will cut 7,000 jobs, representing just over 3 percent of its global workforce. The cuts are likely to predominantly affect the entertainment and ESPN divisions, although the company beat analysts’ expectations for the quarter.
The change comes as Florida Gov. Ron DeSantis seizes control of Disney’s Reedy Creek Improvement District and the company faces a proxy battle with an activist investor seeking a board seat.
Disney CEO Bob Iger plans to lay off about 7,000 employees as he restructures the company.
Most of the layoffs are expected to come from the entertainment division, which includes Disney+, as well as ESPN, which includes ESPN+.
Announcing the new structure Wednesday, Iger compared it to changes he made at the media giant in 2005, when he first became chief executive, and in 2016, when Disney announced a shift to streaming by beefing up its assets with the acquisition of 21st Century Fox.
“Our new structure is intended to return greater authority to our creative leaders and hold them accountable for the financial performance of their content,” he said in an earnings call.
“Our previous structure severed that link and it must be restored,” he continued, noting, “Going forward, our creative teams will determine what content we are creating, how it is distributed and monetized, and how it is marketed.”
Under plans, Alex Bergman and Dana Walden will jointly lead the Disney Entertainment division, with Jimmy Pitaro continuing to lead ESPN and Josh D’Amaro continuing to lead parks and experiences.
And, in addition to the planned layoffs, Disney Chief Financial Officer Christine McCarthy also said the company is targeting $5.5 billion in cost savings, including $3 billion related to future content savings and the $2.5 billion remaining from existing marketing, personnel and technology costs.
But the move comes as Disney beat earnings expectations.
The company announced Wednesday that it earned $1.28 billion, or 70 cents per share, in the three months ending December 31, compared with net income of $1.1 billion, or 60 cents per share a year earlier.
Excluding unique items, Disney earned 99 cents per share. Analysts, on average, expected adjusted earnings of 78 cents per share, according to FactSet.
In total, revenue grew eight percent to $23.51 billion from $21.82 billion a year earlier. Analysts had expected revenue of just $23.44 billion.
The company also said that Disney+ ended the quarter with 161.8 million subscribers, down one percent from Oct. 1, while Hulu and ESPN+ posted two percent increases in paid subscribers.
On the news, Disney shares rose 3 percent in after-hours trading.
Disney finished the fourth quarter of 2022 with $1.28 billion, or 70 cents per share.