Disney Layoffs 2024: Is Disney losing money?

disney layoffs

Disney CEO Bob Iger stated in February 2023’s earnings call that he intended to cut 7,000 positions from the company’s workforce. It’s because the company wanted to save billions of dollars. It’s done through restructuring, content reduction, and payroll reduction. About 220,000 people work for the business, with 166,000 of them in the United States and 54,000 internationally.

Iger also disclosed that the company would be divided into three segments:

  1. There is a division focused on entertainment, which includes film, television, and streaming. TV executive Dana Walden and film chief Alan Bergman will lead it.
  2. There will be a division devoted to sports, led by Jimmy Pitaro.

A division will focus on, led by Josh D’amaro, Disney parks, experiences, and products, led by Jo, an overall exceeding of Wall Street’s forecasts. But Disney’s streaming service, Disney+, saw its first user decline since its November 2019 launch. Thus, Iger’s tight-fisted strategy was driven by the company’s declining subscriber growth and rising competition. Let us view this business in detail in this article.

About the company

The Walt Disney Company, also called Disney, is a global American media and entertainment business. Its headquarters are in Burbank, California, at Walt Disney Studios. Disney Brothers Studio was established on October 16, 1923, by brothers Walt and Roy O. Disney. Before modifying its name to The Walt Disney Company in 1986, it was known as Walt Disney Studios and Walt Disney Productions.

It grew into one of the world’s most giant media corporations during the 20th and early 21st centuries. It has holdings like ABC, ESPN, Pixar, Marvel Entertainment, and 20th Century Fox. One of the most well-known and significant businesses in the world is Disney. On the 2022 Fortune 500 list of the largest companies in the US by revenue, it is listed at position 53.

What happened to Disney?

Marvel Entertainment chairman Isaac “Ike” Perlmutter lost his job. It happened after Disney acquired Marvel Entertainment in March. Yet the first significant layoffs were revealed. Disney’s animation division was not exempt.

Khaki Jones, senior vice president of current programmes at Disney TV Animation, is one of the people who will be laid off. Jones is a 13-year industry veteran. He most recently oversaw the production of all series and short-form content for Disney+ and The Disney Channel.

VP Claire McCabe and Executive Director Meghan de Boer were let go from Disney’s kids division. The two executives started working together last year.

In November last year, Iger was brought back as the company’s CEO to increase profitability. Since then, he has remained committed to achieving that goal. Disney+, Hulu, and ESPN+ are all part of the company’s direct-to-consumer division, which lost $4 billion or more in 2022.

Things to know about Disney’s Layoff

Isaac Perlmutter is a significant shareholder in Disney. He was the focus of Nelson Peltz’s multi-month battle to become a member of the Disney board. According to reports, it was found in February that Perlmutter’s support for Peltz partially resulted from CEO Bob Iger’s choice to remove Perlmutter’s power over Marvel Studios back in 2015. Marvel Entertainment was reduced to little more than consumer goods and book publishing. It is a result of this steep decline in power.

Peltz halted his struggle in February after Iger outlined a $5.5 billion cost-cutting plan. It includes laying off roughly 7,000 people.

The layoffs are a component of the media and entertainment giant’s cost-cutting strategy. It is part of the extensive restructuring that CEO Bob Iger, who made a comeback, announced. In a conference call with analysts, Iger stated:

“This reorganization will result in a more efficient, coordinated approach to our operations.” “We are dedicated to operating effectively, particularly in a difficult environment.”

According to Axios, CNN, and CNBC, the business’s CEO, Bob Iger, reportedly stated in an internal memo that the company would notify staff in three phases. It started with the first affected employees at the end of March.

In April, there will be a larger round of layoffs, eliminating thousands of employees. According to CNBC, the last game will occur before the start of the summer. Iger described the layoffs as part of the company’s “strategic realignment.” He said, “It also involves significant cost-cutting measures. These are required for developing a more efficient, coordinated, and streamlined approach to our operations.”

Now let us look at some things to know about Disney’s layoff, as follows:

Which Disney departments will be affected by the layoffs?

According to CNBC, the layoffs will affect Disney’s media and distribution operations, parks and resorts, and ESPN.

The massive media and entertainment company announced in February that it would have three divisions. They are as follows:

  • Disney Entertainment, which includes the majority of its media and streaming businesses,
  • a branch of ESPN that operates the TV network and the ESPN+ streaming platform,
  • a division for parks, experiences, and products.

Will Disney World or any of the business’s Florida theme parks see layoffs?

Josh D’Amaro, chairman of Disney Parks, stated this in an email to staff in February. He said some layoffs are anticipated within the Disney Parks, Experiences, and Products division. However, they are not expected to affect hourly frontline personnel at Disney’s theme parks.

According to the Orlando Sentinel, significant layoffs within Florida’s theme park business are unlikely. “Very, very bullish about our parks,” added Iger. The parks are now experiencing extremely high demand.

According to state data, Disney has yet to submit any layoff notices for Florida as of March 28, 2023. Companies are required by federal law to provide 60 days’ notice for factory closures and mass layoffs.

Disney job cuts, in numbers

  • The next-generation storytelling and consumer experiences unit had a staff of 50 people, all of whom were laid off.
  • Total number of layoffs scheduled by Disney over the coming months: 7,000, or 3.6% of its worldwide workforce.
  • Estimated cost reductions from the releases are $5.5 billion.

Layoffs at major Entertainment companies

The majority of entertainment businesses are cutting personnel to lower costs.

Beginning with 70 HBO Max personnel, mainly in the casting, acquisitions, and reality TV areas, in August of last year, Warner Bros. Discovery downsized most of the year. The corporation opted to keep 40 open positions unfilled and fired 82 employees from its TV division in October. The company’s sports sector lost about 70 employees the next month.

Separately, Netflix also went on a hiring freeze. It eliminated 150 positions in May 2022 and 300 in June 2022. Additionally, these actions don’t happen by themselves. Netflix introduced its ad-supported tier while decreasing the size of its workforce. 

Warner Bros. increased the monthly cost of HBO Max from $14.99 to $15.99 as of February 2023. Like this, Disney announced layoffs shortly after raising the price of its ad-free service from $7.99 to $10.99 per month.

Much to Disney’s dismay, Trian Group CEO Nelson Peltz has been vying for a Mouse House board position over the past few months.

Peltz has frequently cited many issues. This includes the absence of succession planning in unsustainable industries that could be more sustainable, such as the streaming industry. He asserts that revenue from the profitable parks division, once again the most vital income area, supports the streaming arm.

Disney is taking action to address this. It doesn’t care to be held by Peltz, though. It requested shareholders reconsider their decision to vote for Trian Group representatives in a proxy statement dated February 6.

Disney previewed some more exciting possibilities. This includes sequels to the successful Toy Story and Frozen franchises. This came after breaking the somewhat depressing news about subscriptions and layoffs. But there is no happy ending for those who lose their jobs.

The metaverse was dropped from Disney’s list of priorities after its layoffs!

The Mouse House is leaving the metaverse behind. Disney dissolved its division for consumer experiences and next-generation storytelling. According to the Wall Street Journal, this group was tasked with creating a metaverse strategy.

The entertainment behemoth appointed Mike White as the new department’s director in February 2022. According to then-CEO Bob Chapek, the following excellent storytelling frontier is the “so-called metaverse.” He said White’s role would be to “create our mission and approach for the customer journey through these new story worlds.” This would entail allocating resources, forming partnerships, and enabling knowledge sharing.

White is a former Disney consumer products executive who worked for the corporation for over ten years. The WSJ reports that he has not been fired due to the reduction. Yet, what his future responsibilities will be still needs to be determined.

The CEO of Disney, Bob Iger, who held the position for 15 years until 2020 before returning to take over from Chapek last year, is an avid supporter of the metaverse.

Iger invested in and joined the board of Genies in March 2022, eight months before he returned to Disney. Genies is a young digital business enabling users to make three-dimensional cartoon avatars. It can be used on social media profiles and in the metaverse. He declared at the time that he had “always been drawn to the connection between 

technology and art.” Iger has not made any public statements about Disney’s fading belief in the metaverse.

Disney Layoffs on the Film Side

Deadline learned that most people laid off on the feature side were mid-level and coordinator staffers. Disney is laying off 4K employees across the company to save $5.5 billion.

The Searchlight division was affected. General Disney marketing, PR, distribution, legal, and the 20th and Disney Story divisions were also affected. Many successful executives are among those wiping their brows and ducking the axe.

Bob Iger received Criticism for his CNBC Comments On Strike: He claims to have made $54 million in two years since retiring. Everyone, from two-decade vets to brand-new employees, was affected. But an insider tells Deadline it wasn’t a slaughter like when Disney acquired 20th Century Fox.

Eight people, some of whom transferred from 20th Century Fox, were let go from the story division. Notice was given to workers during meetings with department heads and HR.

According to the study, those fired received a 60-day notice period. They are still required to work for the duration of their employment while receiving a week’s severance pay. Those who were laid off in the past were nonetheless paid when given notice. But they weren’t expected to work.

A large number of those affected are unionized workers. Their severance is based on their years of service and the collective bargaining agreement. Disney strives to provide as much flexibility as possible to employees who have been sacked during the 60-day window. Thus, they can hunt for other employment.

The affected Searchlight departments were legal, production, public relations, and marketing. Searchlight was largely untouched when Disney and 20th Century Fox merged. The 20th vintage arthouse label is now back at its pre-merger employment count, which was in the 100+ staffer range. They grew after the merger as former CEO Bob Chapek shifted Disney towards streaming. 

There will be more cuts. As of April 2023, Pixar in Emeryville, California, has yet to be touched.

Disney successfully eliminates 7,000 jobs.

Disney handed out notices to the remaining workers affected by its third wave of layoffs on May 26 before the Memorial Day holiday weekend. Disney had set a goal of 7,000 releases.

The goal of the Mouse House was to complete these corporate-wide layoffs. They were primarily concentrated in the media divisions and ignored the parks before the summer.

According to a source with direct knowledge of the issue, the firm still intends to cut further positions abroad over time. But Disney reached the threshold it established in February, shortly after Iger’s return as CEO.

Iger outlined a broad cost-cutting plan, with the first wave of job cuts starting on March 27. Disney made 4,000 cuts in total during the second wave, which began the week of April 24 and ended May 26.

As of October 1, 2022, Disney has around 220,000 employees worldwide; therefore, the 7,000 layoffs constitute 3.2%. Out of $5.5 billion in cost savings, $2.5 billion comprises “non-content costs” (such as employee costs). According to Iger, $1 billion of those deliberate cost cuts were already in place in February. Disney wants to cut the cost of non-sports content by $3 billion annually. It should be achieved over the coming years.

As mentioned earlier, the cuts follow Disney’s restructuring into three core business segments. The reductions also coincide with Disney’s decision to remove content from its streaming platforms.

The Company Cuts More Than 2,500 Jobs

This time, Disney layoffs are supposedly here again in 2023 for a third round of employment reduction. According to a source, the Bog Iger-led Disney eliminated further positions in May 2023 and notified those affected.

According to a CNN story, over 2,500 employees have reportedly been affected by this wave of Disney layoffs. However, as stated before by Iger, this wave of job losses at Disney is also believed to be the last large round of layoffs.

Which departments or divisions may be affected by job losses this time are still being determined. Disney continues to lay off employees under Iger’s announcement from February. Before that, in March and April, Disney let go of close to 4,000 workers. These layoffs affected employees at Disney Parks, ESPN, and Disney’s entertainment division, among other places.

As we know, Disney’s CEO revealed in February that the media and entertainment behemoth would eliminate over 7,000 employees from its global workforce. It was said to be finished throughout three rounds.

According to the report, this current round of Disney layoffs is projected to push the total number of employee cuts to more than 6,500. Thus, it is approaching 7,000, as indicated initially by Iger.

Walt Disney’s Pixar targets ‘Lightyear’ executives among 75 job cuts

The first significant layoffs at Walt Disney’s Pixar Animation Studios in ten years have eliminated 75 positions. This includes those of two executives behind the box office flop “Lightyear,” according to sources.

One of the people who lost his job was “Lightyear” director Angus MacLane. He is a 26-year-old animator who worked on critically acclaimed films including “Toy Story 4” and “Coco.” The producer of “Lightyear,” Galyn Susman, also left. Susman had worked for Pixar since the 1995 debut of the first “Toy Story” film.

It was impossible to contact MacLane or Susman for comment. According to the reports, Michael Agulnek, who has served as Pixar’s vice president of global publicity since 2015, was also let go. When contacted for comment by reporters, he did not pick up.

Even though the layoffs are minor compared to Pixar’s employment base of approximately 1,200, they are noteworthy. It’s because the studio is the creative force behind popular brands and characters that generate cash for Disney.

Pixar is well known for the film series “Toy Story,” “The Incredibles,” and “Cars.” Yet “Lightyear,” released a year ago with a $200 million projected budget, only made a meagre $226.7 million in international ticket sales. Also, it earned mixed reviews.

In contrast, Pixar’s “Incredibles 2” in 2018 achieved worldwide box office revenues of $1.2 billion. It reportedly has a similar production budget.

Due to its depiction of a same-sex relationship, “Lightyear” was prohibited from screening in 14 Middle Eastern and Asian nations. This affected how well it did at the box office.

Disney has conducted layoffs across all its businesses. This includes theme parks, streaming services, and the film and television industries.

After delaying the release of the 2015 movie “The Good Dinosaur” and firing its director, Bob Peterson, Pixar last reduced staff in 2013. There were about 30 posts removed. To revive its flagging animation branch, Disney purchased Pixar in 2006.

Conclusion

The cutbacks that have affected thousands of Disney employees in the United States have also reached Africa, the Middle East, and Europe.

The precise number is unknown, according to Deadline. However, about 100 employees were warned in May 2023 that their positions were at risk of being eliminated and have started talks. Both in 

Personnel are based in London and throughout the EMEA region. According to what we hear, the number that could be affected is proportionate to the American employee reductions.

According to sources, marketing, press, and back office operations, including talent acquisition, engineering, and IT, are most at risk. As a critical component of Disney’s long-term strategy, Disney+’s commissions and production teams for Disney+ are believed to be exempt from cuts for the time being. The layoffs have come at the wrong time for the prominent streamers and studios. Since then, they have been severely affected by the current writers’ strike, weak ad market, and a slowing economy.

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