New York: The Walt Disney Co. is planning to freeze hiring and cut some jobs ahead of the winter holidays following a disappointing quarter, according to a report.
In the memo sent to employees, Disney CEO Bob Chapek said the company would be moving forward with prioritizing cost-saving measures including “some staff reductions.”
“I am fully aware this will be a difficult process for many of you and your teams,” Chapek wrote to Disney executives this Veterans’ Day as the House of Mouse heads into its 100th anniversary. “We are going to have to make tough and uncomfortable decisions,” he added in the memo of a process that has clearly been in the works for awhile. “But that is just what leadership requires, and I thank you in advance for stepping up during this important time.”
Bluntly predicting “some staff reductions as part of this review,” Chapek went on to tell top staffers: “While we will not sacrifice quality or the strength of our unrivaled synergy machine, we must ensure our investments are both efficient and come with tangible benefits to both audiences and the company.”
“As we work through this evaluation process, we will look at every avenue of operations and labor to find savings, and we do anticipate some staff reductions as part of this review,” Chapek said in the memo sent on Friday.
Chapek also indicated in the memo that Disney will establish “a cost structure taskforce” to further trim the company’s expenses. It will be led by the CEO, Chief Financial Officer Christine McCarthy, and General Counsel Horacio Gutierrez.
The memo comes just days after McCarthy first announced Disney’s intention to make both short-term and long-term changes to save money.
“We are actively evaluating our cost base currently, and we’re looking for meaningful efficiencies,” she said. “Some of those are going to provide some near-term savings, and others are going to drive longer-term structural benefits.”
Like its media peers, the approximately 190,000-employee strong Disney has felt the pain in 2022, with its stock down more than 40% and inflation, foreign currency fluctuation and the bruising streaming competition applying pressure to its operations. Earlier this week, the company reported quarterly earnings below Wall Street earnings expectations and also issued strikingly soft guidance for fiscal 2023 revenue and profit, further unnerving investors. Its beleaguered shares recovered earlier today, rising 5% to finally bounce off a multi-year low established on Wednesday.
Pay-TV losses have hurt Disney, though the company has vowed to turn a profit in streaming by the end of fiscal 2024.
Its austerity move and hiring freeze follow a series of reorganizations after it acquired most of 21st Century Fox in an industry-changing, $71.3 billion deal in 2019. It has gone to a simplified corporate structure with just two divisions: Parks, Experiences and Products and Media and Entertainment Distribution.
Warner Bros Discovery, which is battling to reduce debt from the $43 billion merger of WarnerMedia and Discovery that closed last April, has also initiated several rounds of cost cuts. NBCUniversal has also shed jobs over the past couple of years as it has reoriented its structure around streaming. Tech giants are also not immune to the downturn, with Meta Platforms announcing it was trimming 13% of its staff this week and Amazon signaling a major cost-cutting effort.
