Disney to cut 7,000 jobs in Iger’s company ‘transformation’
The company said the job reductions are part of a targeted $5.5bn cost savings across the company
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Your support makes all the difference.Bob Iger has announced that the Walt Disney Co will cut about 7,000 jobs as part of a companywide cost-savings plan and “strategic reorganisation”.
The job cuts amount to about 3 per cent of the entertainment giant's global workforce and was unveiled after Disney reported quarterly results that topped Wall Street’s forecasts.
Iger returned as CEO in November last year following a challenging two-year tenure by his handpicked successor, Bob Chapek.
The company said the job reductions are part of a targeted $5.5bn cost savings across the company.
As of 1 October, Disney employed 220,000 people, of which about 166,000 worked in the US and 54,000 internationally.
In a statement, Iger said Disney is embarking on a “significant transformation” that management believes will lead to improved profitability in the company’s streaming business.
The company, which owns Star Wars, Marvel, and Pixar, will focus more on its core brands and franchises, Iger said.
The executive also announced changes to how executives will operate Disney's various divisions. Specifically, creative executives will now be responsible for determining what movies, TV series, or other content to produce, as well as the marketing and distribution.
“Our new structure is aimed at returning greater authority to our creative leaders and making them accountable for how their content performs financially,” Iger said during a call with Wall Street analysts.
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On Wednesday (8 February), the management also said that Disney Plus will achieve profitability by the end of its next fiscal year in September 2024.
The latest results marked the first quarterly snapshot since Iger’s return as CEO.
The move to revamp the company and slash costs comes as Disney is under pressure to turn its business around.
Activist investor Nelson Peltz, CEO of Trian Fund Management, is vying for a seat on Disney's board of directors, arguing that the company’s recent operating performance has been disappointing and the result of self-inflected problems stemming from failed succession planning efforts, a flawed direct-to-consumer strategy and “over-the-top” compensation practices, among other concerns.
Disney has urged shareholders to vote against Peltz and last month named board member Mark Parker as its chairman. Parker, who also serves as executive chairman at Nike Inc., has been tapped to head Disney’s newly created succession planning committee, which will advise the board on CEO succession planning.
Iger also announced that he intends to ask the board to approve the reinstatement of a “modest” dividend by the end of this year. The company suspended its dividend in the spring of 2020, in the early days of the pandemic.
Additional reporting by agencies