Disney, one of the world’s largest entertainment companies, is set to begin the second and largest round of planned layoffs, affecting 4,000 of its projected 7,000 staff cuts. The company expects to complete the process before the start of summer. A staff memo from Disney Entertainment Co-Chairmen Alan Bergman and Dana Walden stated that the affected workers would be notified from Monday through Thursday. The memo also stated that the company was doing everything it could to make sure the process was conducted with respect and compassion.
The company is expected to realize $5.5 billion in cost savings as a result of the layoffs and other austerity measures, as announced in February. ESPN and Parks, Experiences and Products, the other two corporate divisions, will also see staff cuts. However, no frontline operational workers at the company’s theme parks are expected to lose their jobs.
Disney, like its peers in the media business, is contending with the secular decline in its lucrative pay-TV business while trying to continue funding its streaming efforts despite their still-murky economics. The company booked a $1 billion loss in streaming in the most recent quarter, despite record-setting revenue of $5.3 billion. The loss was an improvement over the previous quarter, which saw a $1.5 billion red figure. After several quarters of growth, flagship service Disney+ also moved backward for the first time, shedding 2.4 million subscribers to end the quarter at 161.8 million.
The entertainment industry has been hit hard by the COVID-19 pandemic, with production shutdowns, delays, and a decrease in revenue from theme parks, theaters, and live events. Disney’s layoffs come as a blow to its employees and the industry as a whole. The company has stated that the decision was a difficult one and not taken lightly, but it is necessary for the company’s future.
Source: Deadline
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