After returning late last year as Disney’s CEO, one key element of Bob Iger’s new mandate was to cut costs significantly in order to improve the company’s balance sheet after it had built up sizeable debts from a hiring spree during the pandemic and massive spending to build, launch and grow its Disney+ streaming service.
As expected, part of those cost reductions will involve staff layoffs. Deadline broke a story this week that Disney plans to unveil at its April 3rd shareholders meeting multiple rounds of layoffs, with the first cuts to come later in April. Deadline’s sources used dramatic language to describe the cuts, describing them as “a bloodbath” and “the big one.”
Staff reductions will hit all three of Disney’s major divisions: Entertainment, Parks, and ESPN. In fact, ESPN may receive the steepest cuts since it has become a diminished asset in the 25+ years since Disney acquired it in 1996 together with ABC. At its peak in 2011, ESPN reached 100 million households but that has since dropped to 74 million.
Approximately 7,000 total layoffs are expected, which represents 3% of Disney’s worldwide staff. While Iger has said that layoffs are “not taken lightly,” many large companies have resorted to workforce reduction in recent months, with Disney following in the footsteps of companies such as Meta, Google, and Amazon. Not surprisingly, Wall Street has rewarded companies for taking these steps.