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Disney Will Lay Off 7K Workers As Earnings Show Some Improvement, Despite Billions In Losses
Bob Iger, who returned to head Disney last year after it fired his successor, reported his first quarterly earnings since returning to the job.
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Mike Coppola
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The Walt Disney Co. has a way with words. In a recent letter to shareholders, the media giant said its past year has been “dynamic,” which is a bit like saying Mt. Everest is “undersized.”
In truth, Disney has suffered staggering losses in its streaming platforms ($4 billion in the last fiscal year alone), has witnessed the theatrical market for its animated films evaporate, was forced to fire CEO Bob Chapek just weeks after extending his contract, and even with a recent rebound has seen its collapsing stock price cost investors some $80 billion.
Now, with Bob Iger back at the helm again as CEO, it’s time to see if Disney can become the star of its own Remember the Titans comeback story. Iger presented Disney’s quarterly earnings report on Wednesday, his first since early 2020.
Key Details
- Disney's income was better than expected, thanks to strong returns from its theme parks.
- The company lost $1.5 billion for the quarter, a small improvement from the previous three months.
- Its combined streaming losses are approaching $10 billion, and the company didn't record as many subscribers as anticipated.
- Disney Plus lost 2.4 million subscribers in the quarter, likely a reaction to higher prices.
- In order to cut costs, Disney will fire about 7,000 employees.
"We believe the work we are doing to reshape our company around creativity, while reducing expenses, will lead to sustained growth and profitability for our streaming business, better position us to weather future disruption and global economic challenges, and deliver value for our shareholders," Iger said in a statement.
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Other Challenges
The company's problems also extend into the company’s board of directors, a political clash in Florida and a collective bargaining standoff.
Activist investor Nelson Peltz believes the company is poorly run and wants a board seat (which Disney opposes), Gov. Ron DeSantis and the Florida legislature are still feuding with Disney over the company’s criticism of the state’s discriminatory “Don’t Say Gay” bill, and the union for about 32,000 Disney World workers just overwhelmingly rejected a contract with $1 annual hourly raises (Chapek and Iger pocketed a combined $38 million last year).
While Avatar: The Way of Water is a global blockbuster for Disney, with worldwide theatrical ticket sales of nearly $2.2 billion, recent box-office returns for its animated movies have been catastrophic: Strange World grossed just $73 million worldwide, while Lightyear grossed a fraction of previous Pixar releases and less than a quarter of what Toy Story 4 took in.
The company’s theme parks have rebounded from the pandemic closures, even though consumers are complaining about skyrocketing ticket prices and epic lines.
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Chapek had said in his final earnings report that he believed Disney’s streaming platforms could become profitable by the end of 2024, which could be filed under a staple of Disney storytelling: fantasy.
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