The Walt Disney Company has announced a massive transformation plan, which includes cutting around 7,000 jobs, equivalent to about 3 per cent of its global workforce. The job reductions are part of a targeted $5.5 billion cost savings initiative aimed at improving profitability across the company. As of October 1st, Disney employed around 220,000 people, with 166,000 based in the US and 54,000 internationally.
Disney’s chief executive, Bob Iger, returned to the helm in November following a two-year tenure by his handpicked successor, Bob Chapek. In his statement, Iger emphasized the company’s plans to go on a significant transformation, which he believes will lead to improved profitability at the company’s streaming business. The transformation plan is designed to help Disney’s streaming business, which has faced tepid performance in recent times.
In its latest quarterly results, Disney reported solid growth at its theme parks, which helped offset the underwhelming performances in its video streaming and movie business. The company earned $1.28 billion, or 70 cents per share, in the three months through to December 31st, compared to net income of $1.1 billion, or 60 cents per share, a year earlier. Excluding one-time items, Disney earned 99 cents per share, surpassing analysts’ expectations of 78 cents per share, according to FactSet.
Bob Iger (Via Bob Iger/Twitter)
Disney’s revenue grew 8 per cent to $23.51 billion from $21.82 billion a year earlier, exceeding analysts’ expectations of $23.44 billion. On the streaming front, Disney+ saw a 1 per cent decline in subscribers to 161.8 million by the end of the quarter. However, Hulu and ESPN+ reported a 2 per cent increase in paid subscribers during the quarter.
Following the announcement, Disney’s shares rose 3 per cent in after-hours trading, signaling investors’ optimism about the company’s transformation plan. The job cuts and cost savings initiative will undoubtedly have a significant impact on Disney’s workforce, but the company is positioning itself for future growth and success in the ever-evolving entertainment industry.
