Disney begins its second and largest round of planned layoffs on Monday and expects to cut 4,000 of its expected 7,000 staff cuts by Thursday.
A staff memo from Disney Entertainment Co-Chairmen Alan Bergman and Dana Walden (read it below) delivered the news, indicating that affected workers will be notified between now and Thursday. The final round will go into effect before the start of summer. “These are difficult decisions and we don’t take them lightly – but every decision is made with great thought, and we are doing everything we can to ensure that this process is carried out with respect and compassion,” the executives wrote.
This week’s staff cuts are expected for several weeks, with workers referring to it as “the big one” or, more ominously, a “bloodbath,” as reported by Deadline. The initial wave began on March 27.
The company said last February that it expected to achieve $5.5 billion in cost savings as a result of layoffs and other cost-saving measures. ESPN and Parks, Experiences and Products, the other two corporate divisions, will see staff cuts along with Entertainment. However, no frontline operational workers at the company’s theme parks are expected to lose their jobs.
CEO Bob Iger began outlining plans for downsizing immediately after returning to the top job in November. One area targeted for cuts was the centralized distribution organization created by his predecessor, Bob Chapek. Kareem Daniel, who headed Disney Media and Entertainment Distribution, was let go from the company on Iger’s first official day back in control following Chapek’s ouster.
Like its peers in the media business, Disney is battling a secular decline in its profitable pay-TV business as it tries to continue funding its streaming efforts despite their shaky economics. In the most recent quarter, the company booked a $1 billion streaming loss, despite record-setting revenue of $5.3 billion. The loss was an improvement on the previous quarter, which saw a $1.5 billion red figure. After several quarters of growth, flagship service Disney+ also declined for the first time, shedding 2.4 million subscribers to end the quarter at 161.8 million.
Here’s the full memo from Bergman and Walden:
As you know, several weeks ago the company began notifying employees whose roles were being affected as part of our overall business restructuring and cost-saving efforts. We would like to share that notifications will continue in many areas of the company over the next few days. In addition, restructuring at various businesses will continue over the next two months, and we expect to have more impacts before the summer, as previously shared. Each team is at a different place in this process, and your leaders will share more context for your group soon.
These are difficult decisions and we don’t take them lightly – but every decision is made with great thought, and we do everything we can to ensure that this process is carried out with respect and compassion. The senior leadership teams are working diligently to define our organization’s future, and our biggest priority is getting it right, rather than doing it fast. We recognize that this is a time of uncertainty and thank you all for your understanding and patience.
It’s a time of transition for Disney, and these changes affect everyone, whether your role is affected or not. We are committed to supporting you during this time and encourage you to contact your manager or HR partner with any questions or for guidance, if needed.
While we are confident that these efforts will better position us for the future, we realize that it 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 bring to the work we do every day. And for those leaving the company, please know that your contributions are valued and appreciated – you all played a significant role in making Disney what it is today.
Alan and Dana