In February 2023, The Walt Disney Company announced a significant corporate restructuring aimed at achieving $5.5 billion in cost savings. This initiative includes the elimination of approximately 7,000 jobs, representing about 3.6% of its global workforce. The reorganization divides Disney into three core segments: Disney Entertainment, ESPN, and Disney Parks, Experiences and Products. CEO Bob Iger emphasized that the restructuring is designed to empower creative leaders, restore accountability, and position the company for sustainable growth, particularly in its streaming services.
The layoffs, part of a broader effort to streamline operations, come as Disney faces financial pressures from its streaming services, which have yet to achieve profitability. The company reported a $1.1 billion operating loss in its direct-to-consumer division, which includes Disney+, Hulu, and ESPN+. Despite these challenges, Disney’s overall revenue for the quarter grew 8% to $23.51 billion, with net income rising to $1.28 billion.
Under the new organizational structure, Disney Entertainment will encompass the company’s full portfolio of entertainment media and content businesses globally, including streaming. ESPN will include ESPN networks and ESPN+, and Disney Parks, Experiences and Products will continue to oversee the company’s theme parks, cruise line, resort destinations, and consumer products.
The restructuring also aims to return greater authority to Disney’s creative leaders and make them accountable for the financial performance of their content. Iger stated, “Our new structure is aimed at returning greater authority to our creative leaders and making them accountable for how their content performs financially.”
Disney’s decision to cut costs and restructure follows similar moves by other major media and tech companies, such as Amazon and Google, which have also announced significant layoffs in response to changing economic conditions and overexpansion during the pandemic.
Despite the reductions, Disney remains committed to investing in long-term opportunities. Iger noted that the company will focus more on its core brands and franchises, including Star Wars, Marvel, and Pixar, to drive growth and profitability.
The announcement of the restructuring and job cuts was made during Disney’s fiscal first-quarter earnings call, where Iger also revealed plans to reinstate a dividend by the end of the year, which had been suspended since spring 2020.
As Disney navigates this period of adjustment, the company aims to balance cost-cutting measures with strategic investments to position itself for sustained growth in a challenging economic environment.
