7,000 jobs will be eliminated, according to Disney CEO Bob Iger, as part of a significant restructuring of the entertainment juggernaut.
The layoffs are a part of a strategy to save $5.5 billion and turn Disney+ into a profitable streaming service after it reported its first subscriber decline since 2019.
In his own words, Mr. Iger “did not make this decision lightly.”
Additionally, he presented the first set of financial figures since his return to the organisation in November, which showed Disney+’s ongoing losses.
“I have enormous respect and appreciation for the talent and dedication of our employees around the world,” Mr. Iger said in a statement announcing the job cuts. “And I’m mindful of the personal impact of these changes.”
He said the changes would “better position us to weather future disruption and global economic challenges”.
The job cuts amount to around 3.6% of Disney’s worldwide workforce. Meanwhile, Disney reported an 8% rise in sales to $23.5 billion (£19.45 billion) between October and December last year. Profit also rose, up by 11% to $1.3 billion.
However, Disney+ reported a $1.5bn loss and its subscribers fell by around 2.4m to 161.8m.
The plan will see the company restructure into three segments: entertainment, which will include film, TV, and streaming; sports-focused ESPN; and Disney parks, experiences, and products.
“This reorganisation will result in a more cost-effective, coordinated approach to our operations,” Mr Iger told analysts on a conference call.
The company’s streaming service remained its top priority, he added.
Disney share price rose by more than 5% in extended trade after the announcement.
The changes address some of the criticisms raised in recent months by billionaire activist investor Nelson Peltz, who criticised Disney of overspending on its streaming business.
In response to the announcement Mr Peltz’s Trian Group said: “We are pleased that Disney is listening.”
Mr Iger made a shock return as Disney’s chief executive, less than a year after he retired from the firm.
He was brought back to steer the company through turbulent times after its share price plummeted and Disney+ continued to make a loss.
Mr Iger, who had previously headed Disney for 15 years, replaced Bob Chapek, who took over as chief executive in February 2020.
Mr Chapek was ousted after Disney’s streaming business posted a $1.5bn quarterly loss.
Less than 24 hours after his return to Disney, Mr Iger said he was planning a major shake-up of the business.
At the time, he said he had tasked a group of executives with designing “a new structure that puts more decision-making back in the hands of our creative teams and rationalises costs.”