In an effort to slash $5.5 billion in costs and turn around the streaming division of Walt Disney Co., Bob Iger, the company’s freshly reinstated president, unveiled a massive restructuring on Wednesday that would result in the loss of 7,000 positions.
An estimated 3.6% of Disney’s global staff will be laid off.
After-hours trading saw an 8% increase in Disney shares to $120.77.
Iger announced that he would divide the business into three segments: Disney parks, experiences, and goods; an entertainment unit that includes film, television, and streaming; and an ESPN entity that focuses on sports.
On a conference call with analysts, Iger stated, “This will result in a more cost-effective, unified approach to our operations.” “We are dedicated to operating effectively, particularly in a difficult situation.”
Iger added that he would approach the company’s board to request the restoration of the dividend by the end of 2023.
Pressure is mounting on the CEO, who came out of retirement in November to oversee Disney for two more years. Nelson Peltz, an activist investor, is vying to become a member of Disney’s board of directors, claiming the business has wasted money on streaming and neglected succession planning.
In reaction to sluggish subscriber growth and rising competition for streaming consumers, Disney is the most recent media company to announce job losses. Before this, Disney revealed that its Disney+ streaming media division lost more than $1 billion and had its first quarterly decline in subscriptions.
Layoffs have previously occurred at Netflix and Warner Bros. Discovery.
