- This week, Disney (DIS) will start its downsizing process with a wave of layoffs, beginning the first of three rounds that will ultimately result in around 7,000 job cuts. The move is part of a larger endeavor to decrease corporate expenses and increase free cash flow. Last month, the company revealed that it is aiming to cut $5.5 billion in costs, including $3 billion in content expenditure.
- The layoffs were initially announced in February, with job cuts spanning across Disney's media and distribution division, parks and resorts, and ESPN. Disney is joining the ranks of other legacy media companies that are cutting back on costs and spending. Although Disney+ and its other streaming services were projected to lose money until 2024, the company's shares have seen an 8% uptick this year, recovering from a 44% decline in 2020. It looks like Disney is turning their fortunes around.
Why it matters
Disney will inform employees about job cuts in two phases. The first group will be notified within four days, while the second, larger group will be informed in April, resulting in thousands of job losses. The last round of cuts will happen before summer. CEO Iger has restructured the company and expressed a willingness to sell Hulu since his return. The annual shareholder meeting is scheduled for April 3.
