Disney plans to lay off 7,000 employees to cut costs across the company. CEO Bob Iger announced the news in an earnings call on Wednesday, stating that the move is “necessary to address the challenges we face today.”
Like many companies across the country, Disney is making the changes as part of its efforts to reduce costs in a “challenging economic environment.” Iger says he is “targeting $5.5 billion in cost savings across the company” and that the layoffs “will help achieve this.” Iger did not say which departments the layoffs will affect.
Iger still has his sights set on streaming despite a slowdown in subscriber growth. Disney Plus added only 200,000 subscribers in the US and Canada for a total of 46.6 million, while the international offering (excluding HotStar) had 1.2 million members. Hulu and ESPN Plus experienced similarly slow growth, with 800,000 and 600,000 additions each, respectively.
Disney’s direct-to-consumer division, which also includes streaming services, saw revenue rise 13 percent to $5.3 billion. But it still had an operating loss of about $1.1 billion, which the company attributed to higher costs at Disney Plus and Hulu. The company’s streaming business lost about $1.5 billion last quarter.
“Our priority is the sustainable growth and profitability of our streaming business,” says Iger. “Our current projections indicate that Disney Plus will be profitable by the end of fiscal 2024, and achieving that remains our goal.”
As the results cover the last three months of 2022, it’s too early to say how much effect the ad-supported $7.99 per month tier will have on Disney Plus subscriber numbers. This is something Christine McCarthy, Disney’s chief financial officer, reflected on during the call, noting that the company “does not expect the launch of the Disney Plus ad tier to have a meaningful financial impact until later this fiscal year.”