File: Bob Iger, chairman and chief executive officer of The Walt Disney Company, speaks during an Economic Club of New York event in Midtown Manhattan on Oct. 24, 2019 in New York City.
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The cuts were announced by Disney CEO Bob Iger in February as part of the company’s quarterly earnings report, shortly after his return to the company last November. The layoffs are part of a plan which the company says is aimed at saving $5.5 billion. Those 7,000 jobs make up about 3% of Disney’s global workforce.
The layoffs come amid a shift across the entertainment industry, particularly in streaming, from prioritizing growth to a renewed focus on shorter-term profitability. This change started last year when Netflix lost subscribers for the first time in more than a decade, leading Wall Street to lose faith in what had previously been a fervor to grow above all else.
Disney acknowledged this second round of layoffs in internal memos to staff Monday, according to multiplenewsoutlets.
"We wanted to share that notifications will continue in many areas of the company over the next several days," the heads of Disney's Entertainment business unit — which includes the film, TV, and streaming divisions — wrote in a memo to staff.
This round, set to take place Monday through Thursday, is expected to be significantly deeper than the last one in March. By the time this round’s over, 4,000 staff are expected to have been laid off.
As for why these cuts are divided into multiple rounds of layoffs over the course of months, the memo to Disney Entertainment staff reads, “The senior leadership teams have been working diligently to define our future organization, and our biggest priority has been getting this right, rather than getting it done fast. We recognize that it has been a period of uncertainty and thank you all for your understanding and patience.”
These layoffs will touch numerous areas of the company, including their entertainment, ESPN, theme parks, experiences, and products businesses. However, the company doesn’t plan to cut frontline positions from their theme parks and resorts — the theme parks have been a bright spot for the company since rebounding from pandemic closures, generating strong revenues.
The third and final round of layoffs is scheduled to start before this summer.
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