The Walt Disney Company begins layoffs of 7,000 people

LOS ANGELES – The Walt Disney Company on Monday began the 7,000 layoffs it announced earlier this year, according to a letter sent to employees by Chief Executive Officer Bob Iger, seen by Reuters.

The company’s main divisions, Disney Entertainment, Disney Parks, Experiences and Products and Corporate, will be affected, according to people familiar with the matter. ESPN wasn’t involved in this week’s cut round, but is expected to be included in a later round.

The entertainment industry has experienced a contraction since embracing the early euphoria of video streaming. At this time, the established media company lost billions of dollars by launching a competitor, Netflix Inc.

When Netflix lost subscribers for the first time in a decade in early 2022, they began to curb spending and Wall Street began to prioritize profitability over subscriber growth.

Iger said Disney will begin notifying the first group of employees affected by the job cuts over the next four days. There will be staff reductions.” The final round is expected to start in early summer, according to the letter.

The Burbank entertainment conglomerate announced in February it would cut 7,000 jobs as part of an effort to cut $5.5 billion in costs and monetize its loss-making streaming business.

“The difficult reality of many of our colleagues and friends leaving Disney is not something we take lightly,” Iger wrote, adding that many “bring their lifelong passion for Disney to their work.” There is,” he points out.

While the details of the layoffs were closely guarded by the company, insiders expected the layoffs to take place ahead of Disney’s annual shareholders’ meeting on April 3.

Anxiety is mounting within Disney as rumors swirl about possible areas for cuts.

“It’s a dark black box,” said a Disney executive in an interview with Reuters last week.

Many expected Disney’s Media and Entertainment division, which was discontinued in the corporate restructuring, to be cut significantly. The division has been without a leader since Kareem Daniel left the company in November, shortly after Iger returned as CEO.

“It took a long time to create,” said SVB MoffettNathanson analyst Michael Nathanson, adding that the company “started whispering” about the need to cut costs because Bob Chapek is still Disney’s chief executive. He added that it was last fall when he was responsible.

Josh D’Amaro, chairman of Disney Parks Experiences and Products, sent a memo to theme park employees in February warning that profitable divisions would be cut.

Officials from two unions representing cast members at the Walt Disney World Resort in Orlando, Fla., said “guest-facing” services are not expected to be affected by the layoffs.International said Paul Cox, president of No.” Alliance of Theater Stage Employees Local 631. Reuters