Walt Disney Co. this week begins its plan to cut 7,000 jobs as part of a wider effort to rejuvenate the Burbank entertainment giant's finances and reach profitability at its streaming business.
The first wave of employees facing layoffs will be notified by Disney bosses over the next four days, Chief Executive Bob Iger said in a Monday memo to staff. A second, larger round of cuts will come in April with "several thousand more staff reductions," followed by a final group before the beginning of summer.
The layoffs are spread throughout the company, affecting roles in the units formerly known as Disney General Entertainment and Disney Media and Entertainment Distribution, as well as corporate positions and jobs in the theme parks, experiences and consumer products business, according to people familiar with the matter.
"The difficult reality of many colleagues and friends leaving Disney is not something we take lightly," Iger wrote. "For our employees who aren't impacted, I want to acknowledge that there will no doubt be challenges ahead as we continue building the structures and functions that will enable us to be successful moving forward."
The layoffs were expected.
Iger in February said the company would be shedding workers to help save $5.5 billion in costs in a sign of Hollywood's retrenchment amid challenges in the business of online video.
The cuts underscore the difficulties Disney and other media giants face as they reckon with the realities of streaming, larger economic woes and the challenges facing Iger, the longtime former CEO who took over from the ousted Bob Chapek in November.
The reductions also reflect an uncertain environment for entertainment, media and technology companies that expanded too aggressively during the COVID-19 pandemic.
Upon returning to Disney, Iger quickly faced a proxy fight from billionaire activist investor Nelson Peltz, whose investment firm Trian Fund Management accumulated a $900-million stake in Disney and lobbied the company for a seat on its board of directors. Peltz criticized the company for "self-inflicted" wounds, including poor succession planning and the costly acquisition of 21st Century Fox.
Peltz ended his campaign shortly after Iger announced Disney's cost-cutting plan.
Here's Iger's full memo:
Dear Fellow Employees,
As I shared with you in February, we have made the difficult decision to reduce our overall workforce by approximately 7,000 jobs as part of a strategic realignment of the company, including important cost-saving measures necessary for creating a more effective, coordinated and streamlined approach to our business. Over the past few months, senior leaders have been working closely with HR to assess their operational needs, and I want to give you an update on those efforts.
This week, we begin notifying employees whose positions are impacted by the company's workforce reductions. Leaders will be communicating the news directly to the first group of impacted employees over the next four days. A second, larger round of notifications will happen in April with several thousand more staff reductions, and we expect to commence the final round of notifications before the beginning of the summer to reach our 7,000-job target.
The difficult reality of many colleagues and friends leaving Disney is not something we take lightly. This company is home to the most talented and dedicated employees in the world, and so many of you bring a lifelong passion for Disney to your work here. That's part of what makes working at Disney so special. It also makes it all the more difficult to say goodbye to wonderful people we care about. I want to offer my sincere thanks and appreciation to every departing employee for your numerous contributions and your devotion to this beloved company.
For our employees who aren't impacted, I want to acknowledge that there will no doubt be challenges ahead as we continue building the structures and functions that will enable us to be successful moving forward. I ask for your continued understanding and collaboration during this time.
In tough moments, we must always do what is required to ensure Disney can continue delivering exceptional entertainment to audiences and guests around the world — now, and long into the future. Please know that our HR partners and leaders are committed to creating a supportive and smooth process every step of the way.
I want to thank each of you again for all your many achievements here at The Walt Disney Company.
Sincerely,
Bob
