Disney will begin layoffs this week, the first of three rounds before the beginning of the summer that result in about 7,000 job cuts, according to a memo sent by Chief Executive Bob Iger.
The cuts are part of a broader effort to reduce corporate spending and boost free cash flow. Disney said last month it plans to cut $5.5 billion in costs, including $3 billion in content spend.
“This week, we begin notifying employees whose positions are impacted by the company’s workforce reductions,” Iger wrote in the memo, which was obtained by CNBC. “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 layoffs were initially announced in February. The job cuts will be cross-company, hitting Disney’s media and distribution division, parks and resorts, and ESPN.
Disney is following the lead of Warner Bros. Discovery and other legacy media companies that are cutting jobs and spending. Disney has said its streaming business, led by Disney+, Hulu and ESPN+, will stop losing money in 2024. Disney shares are up about 8% this year after falling 44% last year.
“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,” 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.”
Since returning as CEO, Iger has reorganized the company and acknowledged that he’d consider selling Hulu. Disney will host its annual shareholder meeting April 3, CNBC reports.
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