- CEO Bob Iger made the announcement Monday in a letter to employees
- Iger, recently reinstated as CEO, is working to save the company $5.5 billion
- Several major departments are impacted, with more to come at ESPN eventually
By STEPHEN M. LEPORE FOR DAILYMAIL.COM and REUTERS
PUBLISHED: 01:48 EDT, 28 March 2023 | UPDATED: 08:58 EDT, 28 March 2023
Walt Disney Company began 7,000 layoffs in a letter sent to employees Monday, as CEO Bob Iger works to save the company some $5.5 billion.
Several major divisions of the company – Disney Entertainment, Disney Parks, Experiences and Products, and corporate – will be impacted, according to a person familiar with the matter. The layoffs will also affect Disney workers across the globe, and not just in the United States.
Iger had previously announced the layoffs throughout the company after he took back over as CEO in November.
The cuts come after the company reported profits of $23.51 billion, which exceeded analysts’ expectations of $23.44 billion. However, the company’s stock price has sunk over 30 percent in the past year, as it faces controversy over previous CEO Bob Chapek’s disastrous wading into the culture wars.
In addition, the House of Mouse took a huge publicity blow as Ron DeSantis officially took control of Disney’s Reedy Creek Improvement district in his war with the ‘corporate kingdom’, in a move that will give him the power to select the board and force them to pay $700 million in taxes and debts.
It comes as the governor and Florida’s first lady Casey DeSantis admitted the ‘irony’ that they got married at Disney in 2009 and now are in a battle with the ‘woke‘ corporation.
DeSantis celebrated with the stroke of his pen marking the Disney ‘corporate kingdom coming to an end’ as he vowed to make the company pay its fair share of taxes.
The Sunshine State now has power over the formerly self-governing, special tax exempt district encompassing the entire Walt Disney World Resort, which was established in 1967.
‘Disney loses self-governing status, the State of Florida is the new sheriff in town,’ he said at a press briefing Monday. ‘Buckle up – there’s a lot to get done.’
The entertainment industry has undergone a retreat since its early euphoric embrace of video streaming, when established media companies lost billions as they launched competitors to Netflix.
They started to rein in spending when Netflix posted its first loss of subscribers in a decade in early 2022, and Wall Street began prioritizing profitability over subscriber growth.
Iger said Disney would begin notifying the first group of employees who are impacted by the workforce reductions over the next four days.
A second, larger round of job cuts will happen in April, ‘with several thousand more staff reductions.’ The final round will start before the beginning of the summer, the letter said.
ESPN is not touched by this week’s round of cuts, but is anticipated to be included in later rounds.
‘The difficult reality of many colleagues and friends leaving Disney is not something we take lightly,’ Iger wrote, noting that many ‘bring a lifelong passion for Disney’ to their work.
Details of the layoffs had been closely guarded by the company, though insiders anticipated reductions would happen before Disney’s annual shareholder meeting on April 3.
Anxiety has been building within Disney, as rumors swirled about areas of possible cuts.
‘It’s a dark, black box,’ said one Disney executive who spoke to Reuters last week.
Many had expected cuts to fall heavily on the Disney Media and Entertainment Division, which was eliminated in a corporate restructuring.
The unit has been without a leader since the exit of Kareem Daniel in November, shortly after Iger returned as the company’s CEO.
‘It’s been a long time in the making,’ said SVB MoffettNathanson analyst Michael Nathanson, adding that the company first began ‘to whisper’ about the need to take out costs last fall, when Bob Chapek was still Disney’s chief executive.
Disney releases 100-year anniversary celebration ad for Super Bowl
Josh D’Amaro, chair of Disney Parks, Experiences and Products, sent a memo to theme parks employees in February warning that the profitable division would experience cuts.
Officials for two of the unions representing cast members at Walt Disney World Resorts in Orlando, Florida, said ‘guest-facing’ services were not expected to be affected by the layoffs.
‘I don’t see where, when there are labor shortages in front-facing guest roles, it would be a good decision to lay off workers where the money train starts for the Walt Disney Co,’ said Paul Cox, president of the International Alliance of Theatrical Stage Employees Local 631.
In the February earnings call where the job cuts were announced, Chief Financial Officer Christine McCarthy said the company was looking to save nearly $6 billion.
According to McCarthy, a portion of the cuts will also come from lessening spending for TV and movies.
The rest of the money will come from marketing and other non-content areas.
Last month, Iger also announced that The Walt Disney Company would restructure into three divisions: Entertainment, ESPN, and Parks, Experiences and Products.
After the company aired an ad during last month’s Super Bowl, executives faced heavy backlash for paying millions to show the commercial amid the news of their terminations.
Thirty-second commercials shown during the Super Bowl were reported to cost as much as $7 million a slot.
‘Something about that Disney celebratory ad bugs me … maybe it’s the recent announcement they’re laying off 7,000 employees and spending at least $7m on the ad,’ said one person on Twitter.
Disney said the advert, which reviewed 100 years of film content and thanked fans for their support, was paid for with previous ad credits.
Drew Lewis, Head of Content at Redbear Films, tweeted in February: ‘How many jobs could’ve been saved instead of spending $7m on that 100 year anniversary ad?’
Another user said in a tweet: ‘The layoffs were pitched as cost cutting, spending on a [Super Bowl] ad is not essential.’
One commented under the post by the main Disney account: ‘A company with quite a dark history. How ’bout we address the recent lay off of 7,000 employees?’