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Disney to cut 7,000 jobs and $5.5 billion in costs: What content and platforms could be affected?

The media empire is the latest company to announce job cuts in response to a demand from investors to cut costs as companies anticipate a sluggish 2023.

FILE PHOTO: A screen shows the logo and a ticker symbol for The Walt Disney Company on the floor of the New York Stock Exchange (NYSE) in New York, U.S., December 14, 2017. REUTERS/Brendan McDermid/File Photo
Brendan McDermidREUTERS

The surprisingly strong employment figures for January could be a flash in the pan. The extra 517,000 jobs added are unlikely to be repeated any time soon, especially while wholesale sackings continue at some of America’s largest companies and employers. Disney has announced the imminent firing of 7,000 staff members as part of yet another restructuring in a bid to save billions of dollars.

The company made a net income of $3.19 billion ($3,190,000,000) during 2022.

The decision to sack thousands of staff was anticipated after Reuters acquired a memo in November 2022 announcing reductions. However, this memo discussed “some small staff reductions”; the final total is around 3.5% of some 200,000 employees contracted to Disney last year.

“While this is necessary to address the challenges we’re facing today, I do not make this decision lightly,” said CEO Bob Iger. “I have enormous respect and appreciation for the talent and dedication of our employees worldwide, and I’m mindful of the personal impact of these changes.”

While staff face the dole, investors are pleased at the ‘cost-cutting’ measures as well as the announcement of the return of shareholder dividends, previously suspended since the beginning of the covid-19 pandemic. This support for the move amongst investors was echoed in the share price of the company rising by 4.7%.

What content and platforms could be affected?

Excluding sports, the company is looking to make $3 billion in content related cuts. Iger announced that streaming is a priority for Disney and he wants to make it profitable, though the latest subscriber figures make sombre reading. During the last three months of 2022 the site lost 2.4 million subscribers, falling to 161.8 million worldwide.

On the day of the sacking announcement, the company also reported its first quarterly decrease in subscriptions for its Disney+ streaming media unit, which lost more than $1 billion in 2022.