Disney announces 7,000 layoffs, cuts of 5.5 billion dollars – Corriere.it

After the publication of the quarterly, the entertainment giant Disney also adopts drastic personnel reduction policies similar to those followed by the Big Techs of Silicon Valley and announces that it will cut 7,000 jobs as part of a three-segment reorganization of its activities. This is a 3% reduction in total headcount whose goal is to achieve savings of $5.5 billion over the next 5 years. The US entertainment giant has decided to create three divisions: Disney Entertainment, which includes most of its streaming and media services; an ESPN division that includes the television network and one for parks, experiences and products. This is the new course decided by Bob Iger, the manager who returned to the helm of Disney in November 2022 after a period of difficulty for the group.

Wall Street approves the choice

Walt Disney stock, up 2.5% in the after-hours immediately after the publication of a higher-than-expected quarterly report, then jumped to +9%. And speaking of the accounts, in its first fiscal quarter, the US group recorded earnings per share of 99 cents, against 78 cents of expectations, on revenues of 23.51 billion dollars, against estimates of 23.37 billion dollars.

For Disney + losses of 9 billion since 2019

The decline in the number of subscribers to the Disney+ streaming platform was less than expected, with the number of subscribers of 161.8 million as of December 31, 2022, down more than 1% from three months earlier, but higher than the 161.1 millions of expectations. Price hikes certainly also caused the loss of around 2.4 million subscribers in the quarter. The direct-to-consumer sector, which also includes Disney+, still recorded an operating loss: in the last quarter, it amounted to 1.05 billion dollars, however lower than the forecasts of the experts (1.2 billion dollars). Since it launched in 2019, the Disney+ platform has lost more than $9 billion. The revenue result of the parks, experiences and products division was very positive, being 21% higher than a year earlier to 8.7 billion dollars. Over $6 billion in revenues came from theme parks alone.

Big Tech cuts

With this announcement, the list of layoffs in the US tech and media giants is extended, now exceeding 200,000 people. In January alone, Twitter, after the convulsive transfer of ownership following the purchase of the company by Elon Musk, expelled 3,700 employees. Meta – the holding company that controls Facebook, Instagram and Whatsapp has laid off 11,000 workers, 13% of its employees; the Salesforce group has reduced its workforce by 10% with the cut of 8 thousand employees. And again: Amazon resources decreased by 18 thousand units, the most massive cut in the entire history of the group, which also has 1.5 million employees. In the case of Amazon, the exodus mainly concerned physical stores, including Amazon Fresh and Amazon Go. Microsoft, to focus on strategic priorities, including artificial intelligence, decided to eliminate 5% of the workforce, therefore in addition 10,000 people for a group that employs around 220,000. The 3,500 refugees from Ibm and the 3,000 from the company software giant Sap close this continuously updated ranking.