Disney's quarterly earnings were reported in an official release, and the company reported a similar setback in user growth to Netflix, a main streaming competitor.
The Walt Disney Co. will lay off 7,000 employees 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. In India and other Asian nations like Malaysia, Thailand, and Indonesia, the service is referred to as Disney+ Hotstar. The number of subscribers fell by 6% to 57.5 million from 61.3 million.
As CEO Bob Iger's first significant move since being hired back to oversee the company late last year, entertainment giant Disney announced Wednesday that it was laying off 7,000 workers. The layoffs come in the wake of similar actions taken by US tech behemoths, which have already let go of thousands of workers as the economy crumbles and businesses slow a hiring boom that started at the peak of the pandemic.
As of October 1, Disney employed about 220,000 people, of whom about 166,000 were based in the US. 7,000 jobs lost would account for about 3% of its employee base. It was stated that labour savings would account for 30% of cost savings, technology and procurement would account for 20% of cost savings, and marketing expenses would account for 50% of cost savings.
According to reports, as soon as Disney's new CEO Robert Iger took over from outgoing CEO Bob Chapek last November, the company began implementing its plan for cost-cutting and layoffs. It should be noted that Iger ran the business as CEO for 15 years before he resigned in 2020. With his return, the business has already begun making some major operational changes, including the choice to reduce the number of employees.
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"I do not make this decision lightly. I have enormous respect and appreciation for the talent and dedication of our employees worldwide, "Iger stated during a conference call with analysts after Disney released its most recent quarterly earnings.
Disney's quarterly earnings were reported in an official release, and the company reported a similar setback in user growth to Netflix, a main streaming competitor. The fact that Disney Plus, a streaming service, only retained 200,000 subscribers in the US and Canada, generating a total of 46.6 million subscribers.
The streaming service added 1.2 million more subscribers internationally, excluding Hotstar. While this was happening, its other platforms, Hulu and ESPN Plus, saw a modest increase in the number of subscribers, adding 800,000 and 600,000 new subscribers, respectively, as per media reports.
The long-term expansion and financial success of our streaming business are the company's top priorities, according to Iger. "Our current forecasts indicate Disney Plus will hit profitability by the end of fiscal 2024, and achieving that remains our goal," Iger added. The Disney CEO, however, withheld information about which departments will be affected by the layoffs.
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