Disney announces hundreds of layoffs across its entertainment divisions while doubling down on streaming services as the future of its business model.
At a Glance
- Disney is cutting hundreds of jobs in film and television departments as part of an ongoing cost-reduction strategy
- Affected areas include marketing, publicity, casting, development, and corporate financial operations
- The cuts follow previous layoffs that eliminated over 7,000 positions in 2023
- Disney is shifting resources toward expanding its streaming services, including a new ESPN direct-to-consumer platform
- Despite the layoffs, Disney recently reported a 7% increase in revenue for Q2, reaching $23.6 billion
Latest Round of “Surgical” Cuts
Walt Disney Co. has implemented another round of layoffs, affecting hundreds of employees across its film and television divisions. The job cuts target several departments, including marketing, television publicity, casting, development, and corporate financial operations. This marks the fourth and largest round of layoffs for the entertainment giant in the past 10 months as it continues to restructure its business to focus on streaming growth amid economic challenges in the entertainment industry.
Most of the affected Disney Entertainment Television employees are based in Los Angeles. The company characterized the approach as “surgical,” designed to minimize the number of impacted workers while still achieving significant cost reductions. Disney’s stock responded negatively to the announcement, with shares dropping 0.4% following the news despite recent positive financial performance.
Pattern of Workforce Reduction
The current layoffs follow a series of previous cuts that began last year. In 2023, Disney eliminated approximately 7,000 positions as part of CEO Bob Iger’s ambitious cost-reduction goal of at least $7.5 billion. Earlier this year, nearly 200 employees were let go from the ABC News Group and Disney’s entertainment networks, representing roughly 6% of that workforce. Additional cuts came in October when ABC Signature was shut down and scripted drama and comedy teams were consolidated, resulting in about 30 layoffs.
In July, Disney Entertainment Television implemented another round of staff cuts affecting approximately 140 people, including 60 at National Geographic. These ongoing reductions highlight the significant transformation occurring in the entertainment industry as companies pivot toward direct-to-consumer business models. Disney is not alone in this trend, as NBCUniversal is simultaneously cutting staff while spinning off several cable networks into a new company named Versant.
Streaming-Focused Future
Despite the cuts, Disney maintains a positive outlook for its future. The company recently reported $23.6 billion in revenue for Q2, representing a 7% increase from the previous year. CEO Bob Iger has expressed optimism about the company’s direction and outlook for the remainder of the fiscal year, emphasizing the strategic shift toward streaming services as a primary growth driver.
A key component of Disney’s streaming strategy is the upcoming launch of a direct-to-consumer ESPN service priced at $29.99. This new offering aims to leverage Disney’s successful sports network in the digital space. While a specific launch date hasn’t been announced, the company plans to reveal more details by late summer. This move demonstrates Disney’s commitment to competing in the increasingly crowded streaming industry, where companies are investing heavily in original content, exclusive deals, and various pricing strategies to attract subscribers.
Balancing Cuts with New Opportunities
While Disney continues to reduce positions in traditional entertainment sectors, the company has indicated plans to create new jobs, particularly in Disney experiences like theme parks. This approach suggests a strategic reallocation of resources rather than simply cutting costs across the board. The entertainment giant appears to be carefully positioning itself for a digital-first future while maintaining its strengths in physical entertainment venues that continue to draw millions of visitors annually.
As the entertainment landscape continues to evolve rapidly, Disney’s strategic moves reflect both the challenges and opportunities facing legacy media companies in the digital age. The company’s willingness to make difficult personnel decisions while investing in growth areas demonstrates a forward-looking approach to maintaining its position as an entertainment leader in a rapidly changing market environment.
