Disney to Enact Layoffs, Cost-Cutting Moves Amidst Economic Downturn
Disney enact layoffs, implementing a targeted hiring freeze and limiting company travel as part of a sweep cost-cutting move announced to leadership last Friday.
This was announced to leadership Friday in a memo obtained by Variety. Disney CEO Bob Chapek wrote: “I am fully aware this will be a difficult process for many of you and your teams. We are going to have to make tough and uncomfortable decisions.” These efforts will be overseen by the newly formed “cost structure task force” comprised of Chapek, CFO Christina McCarthy, and the general counsel.
Although the company saw subscriptions for Disney+, which launches its ad-supported tier on Dec. 8, significantly surpass Wall Street’s expectations, Disney reported an operating loss for its streaming segment of $1.47 billion for the quarter that ended Oct. 1, 2022, about $800 million more than the year-earlier period.
The company’s revenue increased 8% to $4.9 billion, which they credited to higher losses at Disney+ and ESPN+ as well as lower results from Hulu. In contrast, the revenue for Disney’s linear television networks (pay TV and broadcast) fell 5% this quarter.
The company is also conducting a “rigorous review of the company’s content and marketing spending.” We can only hope that these decisions will help get Disney back on track financially so that they can continue to bring joy to people all over the world.
The recession has increasingly become more aggressive and broadened beyond just the tech industry- now entertainment is being affected as well. This is a trying time for numerous companies, Disney included. However, they are making the difficult decisions needed in order to make it through this economically challenging period.
LAStartups.com is a digital lifestyle publication that covers the culture of startups and technology companies in Los Angeles. It is the go-to site for people who want to keep up with what matters in Los Angeles’ tech and startups from those who know the city best.
