- Disney is beginning its second round of layoffs Monday. Following this round, 4,000 people will have been laid off from the company.
- A third round is expected to start before the beginning of the summer, Disney officials said.
- Disney plans to reduce its workforce by 7,000 jobs as part of a larger reorganization that will see the company cut $5.5 billion in costs.
Disney began its second, larger wave of layoffs Monday, bringing total job cuts in recent weeks to 4,000 when the latest round is completed.
Earlier this year, Disney said it would slash 7,000 jobs from its workforce as part of a larger reorganization of the company that will see it cut costs by $5.5 billion. The announcement was made during Bob Iger's first earnings call since returning as CEO.
Disney officials said Monday that they don't take the departure of so many colleagues lightly. Eliminating 7,000 jobs from its workforce equates to about 3% of the roughly 220,000 people Disney employed as of Oct. 1, according to a securities filing, with roughly 166,000 in the U.S. and about 54,000 internationally.
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Disney notified employees of a first wave of layoffs on March 27, which saw cuts in its metaverse strategies unit and part of its Beijing office.
"The senior leadership teams have been working diligently to define our future organization, and our biggest priority has been getting this right, rather than getting it done fast," reads a note to employees Monday from co-chairmen of Disney Entertainment, Alan Bergman and Dana Walden.
The second round of cuts, which will be completed Thursday, will affect various divisions across the company, including Disney Entertainment and ESPN, as well as Disney Parks, Experiences and Products. The jobs affected will span across the country from Burbank, California, to New York and Connecticut. CNBC reported last week layoffs would soon commence at ESPN.
ESPN is first eliminating off-camera employees in the three rounds of cuts and will do a separate talent evaluation over the summer, which will conclude in additional cuts and non-renewals of contracts, one of said a person familiar with the matter. ESPN is eliminating less than 100 jobs in this round, the person said.
"As we advance as a core segment of Disney, with operational control and financial responsibility, we must further identify ways to be efficient and nimble," ESPN CEO Jimmy Pitaro wrote in a note to employees obtained by CNBC. "We will act with compassion, respect for our colleagues, and professionalism as we face these hard circumstances."
Disney said it expects to start its third wave of layoffs before the beginning of the summer in order to reach the 7,000 target. Disney has previously said it doesn't expect layoffs to affect its hourly workers at its parks and resorts.
Iger said earlier this year Disney's cost reductions would include cutting $3 billion in content expenses, excluding sports, and the remaining $2.5 billion from noncontent cuts. At that point, Disney executives said about $1 billion in cost-cutting had already been underway since last quarter.
The cost-cutting measures at Disney come as media companies have been pulling back on content spending — and spending in general — as they look to make their streaming businesses profitable. The reorganization was also put into place when Disney was still in the midst of a proxy fight with Nelson Peltz and his firm Trian Management. Soon after the announcement, Peltz called off his proxy war.
Here's the full memo sent to Disney employees Monday from Bergman and Walden:
As you all know, a few weeks ago the company began notifying employees whose roles are impacted as part of our overall business realignment and cost-savings efforts. We wanted to share that notifications will continue in many areas of the company over the next several days. In addition, restructuring in various businesses will continue for the next couple of months, and we do anticipate there will be further impacts before the summer, as previously shared. Each team is in a different place in this process, and your leaders will be sharing more context for your group soon.
These are hard decisions and not ones we take lightly – but every decision has been made with considerable thought, and we are doing everything we can to make sure this process is conducted with respect and compassion. The senior leadership teams have been working diligently to define our future organization, and our biggest priority has been getting this right, rather than getting it done fast. We recognize that it has been a period of uncertainty and thank you all for your understanding and patience.
This is a time of transition for Disney, and these changes affect everyone, whether or not your role is impacted. We are committed to supporting you through this period and encourage you to reach out to your leader or HR partner with any questions or for guidance, as needed.
While we are confident that these efforts will better position us for the future, we realize this all takes a toll. We want to acknowledge the impact of this moment and simply reiterate our appreciation for all of you and the passion and dedication you've brought to the work we do every day. And for those who will be leaving the company, please know that your contributions are valued and appreciated – you have all played a meaningful role in making Disney what it is today.
Alan & Dana
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