Bob Iger, the CEO of Disney, announced on Monday that the company would initiate staff layoffs this week. This will be the first of three rounds of cuts that were anticipated after his announcement in February that 7,000 jobs would be eliminated.
Disney's worldwide staff reductions form part of a multi-billion dollar effort to reduce costs and simplify operations during a time of upheaval in the media industry.
According to a memo acquired by CNN, Iger has announced that the company will be implementing layoffs in three stages. The initial phase will commence this week, with managers informing impacted workers shortly. A more significant round of layoffs, resulting in the dismissal of several thousand employees, will take place in April.
The third and final stage will occur "before the start of summer," allowing the company to achieve its objective of cutting 7,000 positions.
In a memo, Iger acknowledged the challenging reality of colleagues and friends departing from Disney, emphasizing that the company must prioritize delivering outstanding entertainment to audiences and guests worldwide, both presently and in the future.
As of October 1, Disney had roughly 220,000 employees, with approximately 166,000 situated in the US. The decision to cut 7,000 jobs amounts to about 3% of its global workforce. The layoffs come after Iger's reinstatement as Disney's leader in November, following the board's termination of Bob Chapek.
Here is a summary of his highlights in the memo to his fellow employees.
"In February, I informed you of our challenging choice to downsize our workforce by around 7,000 positions. This move was part of our company's strategic realignment, which involved implementing cost-saving measures to establish a more efficient, integrated, and simplified approach to our operations. Our senior executives have been collaborating with HR to evaluate their functional requirements, and I would like to provide you with an update on their progress.
Starting this week, we will begin informing employees whose roles will be affected by the company's workforce reductions. The first group of impacted employees will receive direct communication from their leaders over the next four days. In April, a second, larger round of notifications will take place, resulting in several thousand more staff reductions. We anticipate the final round of notifications to begin before the summer, to achieve our target of reducing 7,000 jobs.
We understand that the departure of many colleagues and friends from Disney is a difficult reality. Our company is home to the most talented and dedicated employees in the world, many of whom bring a lifelong passion for Disney to their work. This is what makes working at Disney so special, and also what makes it challenging to bid farewell to wonderful people we care about deeply. We would like to express our sincere gratitude and appreciation to all departing employees for their countless contributions and unwavering dedication to this beloved company.
To our unaffected staff, I recognize that there may be obstacles as we work towards establishing the necessary systems and processes for future success. Your cooperation and comprehension during this period are greatly appreciated.
During challenging times, it is crucial that we prioritize Disney's ability to provide outstanding entertainment to global audiences and visitors, both now and in the future. Our HR team and executives are dedicated to ensuring a seamless and supportive experience throughout the transition.
Once more, I extend my gratitude for your numerous accomplishments at The Walt Disney Company."
Sincerely,
Bob.
Also, recall that Disney+, which is Netflix's main competitor in the streaming market, experienced a one percent drop in subscribers to 161.8 million customers on December 31 compared to the previous quarter. Analysts anticipated the decline, and following the announcement, Disney's stock price rose by over five percent during after-hours trading.