Disney Begins Largest Wave Of Layoffs, Will Get More Than Halfway To Target Of 7,000 Staff Cuts This Week
Disney is initiating the second and largest round of its planned layoffs Monday and expects to reach 4,000 of its projected 7,000 staff cuts by Thursday.
A staff memo from Disney Entertainment Co-Chairmen Alan Bergman and Dana Walden (read it below) delivered the news, indicating that affected workers would be notified from now through Thursday. A final round will take effect before the start of summer. “These are hard decisions and not ones we take lightly – but every decision has been made with considerable thought, and we are doing everything we can to make sure this process is conducted with respect and compassion,” the execs wrote.
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This week’s staff reductions have been anticipated for weeks, with workers referring to it as “the big one” or, more ominously, a “bloodbath,” as Deadline has reported. The initial wave began on March 27.
The company said last February it expects to realize $5.5 billion in cost savings as a result of the layoffs and other austerity measures. ESPN and Parks, Experiences and Products, the other two corporate divisions, will see staff cuts along with Entertainment. No frontline operational workers at the company’s theme parks are expected to lose their jobs, however.
CEO Bob Iger began outlining plans for downsizing soon after returning to the top job last November. One area targeted for cuts has been the centralized distribution organization created by his predecessor, Bob Chapek. Kareem Daniel, who led Disney Media and Entertainment Distribution, was let go from the company on Iger’s first official day back at the controls following Chapek’s ouster.
Like its peers in the media business, Disney is contending with secular decline in its lucrative pay-TV business at the same time it is trying to continue funding its streaming efforts despite their still-murky economics. In the most recent quarter, the company booked a $1 billion loss in streaming, 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 backwards for the first time, shedding 2.4 million subscribers to end the quarter at 161.8 million.
Here is the full memo from Bergman and Walden:
As you all know, a few weeks ago the company began notifying employees whose roles are impacted as part of our overall business realignment and cost-savings efforts. We wanted to share that notifications will continue in many areas of the company over the next several days. In addition, restructuring in various businesses will continue for the next couple of months, and we do anticipate there will be further impacts before the summer, as previously shared. Each team is in a different place in this process, and your leaders will be sharing more context for your group soon.
These are hard decisions and not ones we take lightly – but every decision has been made with considerable thought, and we are doing everything we can to make sure this process is conducted with respect and compassion. The senior leadership teams have been working diligently to define our future organization, and our biggest priority has been getting this right, rather than getting it done fast. We recognize that it has been a period of uncertainty and thank you all for your understanding and patience.
This is a time of transition for Disney, and these changes affect everyone, whether or not your role is impacted. We are committed to supporting you through this period and encourage you to reach out to your leader or HR partner with any questions or for guidance, as needed.
While we are confident that these efforts will better position us for the future, we realize this all takes a toll. We want to acknowledge the impact of this moment and simply reiterate our appreciation for all of you and the passion and dedication you’ve brought to the work we do every day. And for those who will be leaving the company, please know that your contributions are valued and appreciated – you have all played a meaningful role in making Disney what it is today.
Alan & Dana
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