Walt Disney Co. to cut 7,000 jobs in multibillion-dollar cost-cutting initiative
Walt Disney co. to cut 7,000 jobs
Disney job cut: Walt Disney Co. has decided to cut 7,000 jobs from its global workforce in response to its paid subscriber base on its video streaming service Disney+ declining by 1% in the October to December quarter to 161.8 million. The move is referred as a part of a multibillion-dollar cost-cutting initiative aimed at streamlining the company's operations during a period of media industry turmoil. (Disney job cut)
As of October 1, Disney had employed nearly 2lakh twenty thousand people, with approximately 166,000 of them based in the United States. A lay-off of 7,000 employees represents about 3% of its global workforce.
Disney job cut: CEO Bob Iger says
"While this is necessary to address the challenges we face today, I do not make this decision lightly," said CEO Bob Iger, who took over as CEO in November after the board fired Bob Chapek.
"I have a great deal of respect and appreciation for the talent and dedication of our employees all over the world, and I'm aware of the personal impact of these changes."
Iger also took steps to reward shareholders, while Disney employees will suffer as a result of the job cuts. The company had suspended dividend payments as well during the pandemic. Iger said that he expects it to return.
"Now that the pandemic effects on our business have subsided, we intend to ask the board to approve the reinstatement of a dividend by the end of the calendar year," he added.
"This will be possible thanks to our cost-cutting initiatives. And, while it will be a small dividend at first, we hope to increase it over time."
Cost-cutting effort
The job cuts are part of a cost-cutting effort that was also announced on Wednesday. Iger further said that the company's goal is to save USD 5.5 billion in costs across the board, with USD 2.5 billion coming from annual savings in "non-content" operations. Content operations are business units that include things like movies and television shows.
According to media report, the company said that 50% of the cost savings would come from marketing expenses, 30% from labour savings, and 20% from less spending on technology, procurement, and other expenses. Because Disney is a major advertiser, a USD 1 billion decrease in annual marketing expenditures portends more difficulties for other media and technology companies.
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