Bob Iger has returned to the role of CEO of Disney and Disney layoffs 2023 are here with him!
Bob Iger is taking decisive action to reduce costs by announcing the layoffs of 7,000 employees as part of Disney’s cost-saving efforts. This move represents 3.2% of Disney’s total headcount of approximately 220,000 employees worldwide as of October 1, 2022.
The layoffs are aimed at achieving a target of $5.5 billion in cost savings, with $2.5 billion of that target representing non-content costs, including labor costs, and $1 billion already underway. The expected reduction of $3 billion in non-sports content costs is anticipated to be realized over the next several years, according to Disney CFO Christine McCarthy.
How many jobs will be affected by Disney layoffs 2023?
It is estimated that 50% of the $2.5 billion in non-content expenses will come from marketing spending, 30% from labor costs, and 20% from technology, procurement, and other expenses. Disney expects the cost savings to be fully realized by the end of fiscal 2024. Iger has stated that he did not make the decision to lay off employees lightly and expressed his appreciation and respect for the dedication of Disney’s employees worldwide.
What’s after Disney layoffs 2023?
Iger also announced a new operating structure for the company that they are going to start after Disney layoffs 2023, which will be organized into three core business segments: Disney Entertainment, ESPN, and Disney Parks, Experiences and Products. This restructuring disassembles the Disney Media and Entertainment Distribution (DMED) group established by former CEO Bob Chapek in 2020.
In the December 2022 quarter, Disney exceeded Wall Street expectations in terms of top and bottom lines. However, Disney+ saw its first-ever decline in subscribers, shedding 2.4 million, driven by losses at Disney+ Hotstar, which is available in India and parts of Southeast Asia. The announced Disney layoffs 2023 were a significant part of Iger’s plan to reduce costs and streamline the company’s operations.
Why are we seeing that many layoffs in the first quarter of 2023?
The decision to lay off employees is not unique to Disney and is a trend that is being seen across many industries. The COVID-19 pandemic has had a profound impact on the global economy and has resulted in a sharp contraction in economic activity. This has led to widespread job losses and reductions in employment, with many companies struggling to remain profitable. As a result, companies are looking for ways to cut costs and streamline their operations, and layoffs are often seen as one of the most effective ways to achieve this goal.
In addition to the impact of the pandemic, the rise of automation and technological advancements is also playing a role in the trend towards layoffs. As companies adopt new technologies and automate many of their processes, there is often a reduction in the number of employees needed to perform those tasks. This is leading to a shift in the types of jobs available and a reduction in the number of people employed in certain industries.
It’s important to note that layoffs can have far-reaching consequences beyond the affected employees. They can result in a decrease in consumer spending, which can have a negative impact on the wider economy. Furthermore, layoffs can also lead to an increase in poverty and inequality, as those who lose their jobs may struggle to find new employment and support themselves and their families.
And it is certainly not special to 2023, there have been a lot of layoffs in 2022 as well.
The Disney layoffs 2023 are part of a broader trend of job losses and reductions in employment that is being seen across many industries. The COVID-19 pandemic and the rise of automation are contributing factors to this trend, and it’s crucial that companies take a measured and responsible approach to layoffs, considering the impact they may have on employees and the wider economy.
Iger has stated that he did not make the decision to lay off employees lightly and expressed his appreciation and respect for the dedication of Disney’s employees worldwide, highlighting the need for empathy and compassion in these difficult times.