With eye on streaming service profits, Disney to cut 7,000 jobs

ORLANDO, Florida: Under recently reinstated CEO Bob Iger, Walt Disney Co. announced this week that it is cutting 7,000 jobs, or 3.6 percent of the company’s global workforce, to save $5.5 billion in costs and seek to make its streaming business profitable.

The firings came after activist investor Nelson Peltz, who is seeking a seat on the Disney board, criticized the company for overspending on its streaming service.

In a statement this week, a spokesperson for Peltz’s Trian Group said, "We are pleased that Disney is listening."

The company will restructure into three segments, which are an entertainment unit that encompasses film, television and streaming; a sports-focused ESPN unit; and Disney parks, experiences and products.

During a conference call with analysts, Iger said, "This reorganization will result in a more cost-effective, coordinated approach to our operations. We are committed to running efficiently, especially in a challenging environment."

Iger also stressed that streaming remained Disney’s top priority, while Peltz had advocated for a restoration of the company’s dividends by fiscal 2025.

"My sense is that Disney is already doing many of the things Nelson Peltz is demanding, though not necessarily in response to pressure from him," noted Paul Verna, principal analyst at Insider Intelligence, as quoted by Reuters.

Disney is the latest media company to cuts jobs amid slowing subscriber growth and increased competition for streaming viewers.

Disney previously announced its first quarterly decline in subscriptions for its Disney+ streaming media unit, which lost more than $1 billion.

Iger stepped down as CEO in 2020, but he returned to the role in November 2022.