Disney plans layoffs and hiring freeze amid tough economic times | New
Disney CEO Bob Chapek has warned of “difficult and uncomfortable decisions” ahead and has set up a cost structure task force to implement measures that will include staff layoffs, a hiring freezes and travel restrictions.
Chapek informed executives of the move in a memo today. Disney missed its revenue and earnings targets in the fourth quarter and its stock has fallen about 37% in the past 12 months.
More broadly, the company plans to tighten its belt like other media giants are doing in response to tough economic times. Warner Bros. Discovery has rolled out layoffs as it seeks to cut $3 billion and Paramount Global has indicated cuts are on the horizon.
Chief Financial Officer Christine McCarthy and General Counsel Horatio Gutierrez will be part of the task force and it was McCarthy who told analysts on the earnings call earlier this week that the company is expected to make “economic gains”. ‘significant effectiveness’.
Leaders will be asked to eliminate all but essential business travel, and Chapek encouraged them in the memo to hold virtual meetings whenever possible. The company will review its content and marketing spend, though it remains to be seen what impact this will have on non-flagship theatrical features or producing originals for streaming platforms.
In an excerpt from the memo, the Disney CEO said, “I fully appreciate that this will be a difficult process for many of you and your teams. We are going to have to make difficult and uncomfortable decisions. But that is exactly what leadership requires, and I thank you in advance for stepping up at this important time. Our company has overcome many challenges over its 100-year history, and I am confident that we will achieve our goals and create a more agile company that is better suited to the environment of tomorrow.
It appeared during this week earnings call that Disney+ added 12.1 million global subscribers to reach 164.2 million. The ad-free tier will launch next month, and the platform is expected to become profitable in fiscal 2024.