Disney Plans to Cut 7,000 Jobs and Reward Shareholders

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- NBC Palm Springs, Feb. 8, 2023. Ed.

(CNN) — Disney said it would cut 7,000 jobs from its global workforce, part of a multibillion-dollar cost-cutting initiative aimed at streamlining the company’s operations in a period of media industry turmoil. Disney had about 220,000 workers as of October 1, of which approximately 166,000 were employed in the U.S. A cut of 7,000 jobs represents about 3% of its global workforce. “While this is necessary to address the challenges we’re facing today, I do not make this decision lightly,” said CEO Bob Iger, who returned to lead the company in November when the board fired Bob Chapek as the company’s leader.

“I have enormous respect and appreciation for the talent and dedication of our employees worldwide, and I’m mindful of the personal impact of these changes.”

Iger also took steps to reward shareholders, while Disney employees will feel pain from the job cut announcement. The company had suspended its dividend payments during the pandemic. Iger announced it expects that to return. “Now that the pandemic impacts to our business are largely behind us, we intend to ask the board to approve the reinstatement of a dividend by the end of the calendar year,” he said. “Our cost-cutting initiatives will make this possible. And while initially, it will be a modest dividend, we hope to build upon it over time.”

Cost cutting efforts. The job cuts come as part of a cost-cutting effort also announced Wednesday.

Iger said the company is aiming for $5.5 billion of cost savings across the company, with $2.5 billion of that coming from annual savings in “non-content” operations. Content operations refers to business units such as movies and television shows. It said 50% of the cost savings would come from marketing expenses, 30% from labor savings and 20% of the cost savings would come from less spending on technology, procurement and other expenses. Since Disney is a major advertiser, a $1 billion reduction in annual marketing expenditures signals more difficulties ahead for other media, as well as tech companies.

The sweeping job cuts were announced by Iger after the company released better than expected financial results for the 4th quarter of 2022. Disney revenue in the quarter rose 8% to $23.5 billion, edging past estimates of $23.4 billion from analysts surveyed by Refinitiv...- More, https://nbcpalmsprings.com/2023/02/08/disney-plans-to-cut-7000-jobs-and-reward-shareholders/