Disney CEO Bob Iger announced back in February that downsizing was on the horizon, describing it as a key to achieving $5.5 billion in cost savings. Managers have been finalizing details of the new structure during subsequent weeks. Now, in a memo to employees from Mr. Iger, (read below) the first of three rounds of cutbacks will begin this week.
“In tough moments, we must always do what is required to ensure Disney can continue delivering exceptional entertainment to audiences and guests around the world – now, and long into the future,” Iger wrote in the memo.
For now, Mr. Iger has maintained that ESPN is likely to stay in the corporate fold, though it could offer a stand-alone streaming version in the not-too-distant future. As for Hulu, Mr. Iger has indicated all scenarios are on the table. Disney operates Hulu but does not fully own. Comcast’s 33% financial stake can be bought our by Disney in 2024, or Disney could decide to unload the streaming operation.
The reduction in staff could be helpful to Disney’s stock, at least in the short term. As with many media stocks over the past year-plus, Disney shares have hit hard times, losing about half their value since summer of 2021. Stocks saw an initial surge after Iger’s return but in recent months have leveled off.
Bob Iger’s Memo to Employees:
Dear Fellow Employees,
As I shared with you in February, we have made the difficult decision to reduce our overall workforce by approximately 7,000 jobs as part of a strategic realignment of the company, including important cost-saving measures necessary for creating a more effective, coordinated and streamlined approach to our business. Over the past few months, senior leaders have been working closely with HR to assess their operational needs, and I want to give you an update on those efforts.
This week, we begin notifying employees whose positions are impacted by the company’s workforce reductions. Leaders will be communicating the news directly to the first group of impacted employees over the next four days. A second, larger round of notifications will happen in April with several thousand more staff reductions, and we expect to commence the final round of notifications before the beginning of the summer to reach our 7,000-job target.
The difficult reality of many colleagues and friends leaving Disney is not something we take lightly. This company is home to the most talented and dedicated employees in the world, and so many of you bring a lifelong passion for Disney to your work here. That’s part of what makes working at Disney so special. It also makes it all the more difficult to say goodbye to wonderful people we care about. I want to offer my sincere thanks and appreciation to every departing employee for your numerous contributions and your devotion to this beloved company.
For our employees who aren’t impacted, I want to acknowledge that there will no doubt be challenges ahead as we continue building the structures and functions that will enable us to be successful moving forward. I ask for your continued understanding and collaboration during this time.
In tough moments, we must always do what is required to ensure Disney can continue delivering exceptional entertainment to audiences and guests around the world – now, and long into the future. Please know that our HR partners and leaders are committed to creating a supportive and smooth process every step of the way.
I want to thank each of you again for all your many achievements here at The Walt Disney Company.
Sincerely,
Bob
Do you feel sad for the employees impacted by the staff reductions?