Walt Disney Co. this week begins its plan to cut 7,000 jobs as part of a wider effort to rejuvenate the Burbank entertainment giant's finances and reach profitability at its streaming business.
The first wave of employees facing job losses will be notified by Disney bosses over the next four days, Chief Executive Bob Iger said in a Monday memo to staff. A second, larger round of cuts will come in April, with "several thousand more staff reductions," followed by a final group before the beginning of summer.
The cuts are spread throughout the company, affecting roles in the units formerly known as Disney General Entertainment and Disney Media and Entertainment Distribution, as well as corporate positions and jobs in the theme parks, experiences and consumer products business, according to people familiar with the matter.
"The difficult reality of many colleagues and friends leaving Disney is not something we take lightly," Iger wrote. "For our employees who aren't impacted, I want to acknowledge that there will no doubt be challenges ahead as we continue building the structures and functions that will enable us to be successful moving forward."
The layoffs were expected.
Iger in February said the company would be shedding workers to help save $5.5 billion in costs, in a sign of Hollywood's retrenchment amid challenges in the business of online video.
The cuts underscore the difficulties Disney and other media giants face as they reckon with the realities of streaming, larger economic woes and the challenges facing Iger, the longtime former CEO who took over from the ousted Bob Chapek in November.
The reductions also reflect an uncertain environment for entertainment, media and technology companies that expanded too aggressively during the covid-19 pandemic.
Upon returning to Disney, Iger quickly faced a proxy fight from billionaire activist investor Nelson Peltz, whose investment firm Trian Fund Management accumulated a $900-million stake in Disney and lobbied the company for a seat on its board of directors. Peltz criticized the company for "self-inflicted" wounds, including poor succession planning and the costly acquisition of 21st Century Fox.
Peltz ended his campaign shortly after Iger announced Disney's cost-cutting plan.