No Storybook Ending: Disney Plans Another Round Of Layoffs

Disney turned a new chapter earlier this year when Josh D’Amaro took over the century-old entertainment giant from Bob Iger as chief executive. But the closely watched succession has occurred against the troubling backdrop of recent reorganization and a questionable turnaround effort, leaving Wall Street analysts with mixed feelings.

The Wall Street Journal reports that D’Amaro is set to continue the layoffs that started under Iger’s watch, with a new round of approximately 1,000 workers that could be announced in the near term.

For those employees, there is no happy storybook ending to Disney’s next round of layoffs, which will impact the recently consolidated marketing department.

Iger, who returned to save the sinking Disney ship in 2022, launched major restructuring efforts that included the elimination of more than 8,000 jobs. Most of the cuts centered on entertainment, ESPN, and corporate units, while parks and cruise operations have largely remained untouched and continued to expand.

The report continued:

Disney has been consolidating long-siloed operations to cut costs and coordinate its efforts across divisions, particularly online. The company combined marketing for entertainment, experiences and sports under a single chief marketing officer, Asad Ayaz, for the first time, in January. Ayaz’s plan to unite the marketing group and reduce expenses is code-named Project Imagine, according to people familiar with the matter.

Disney is also combining the staff of its Disney+ and Hulu streaming services as it goes about merging both brands into one app. The company has been working with consultants from Bain & Co. to strategize its cost-cutting.

The decision to reduce headcount reflects broader pressure across Hollywood (death of Hollywood in charts), where traditional TV profits have softened, box-office returns remain muted, and streaming has become increasingly unprofitable. Disney is also trying to free up capital for faster-growing digital businesses.

The latest Bloomberg data shows Disney’s overall workforce consists of 231,000 full- and part-time employees.

Reshaping Disney to appease shareholders comes as the stock is down nearly 13% for the year (as of Wednesday’s closing). Shares trade at Covid lows and have been locked in a trough since mid-2022.

“This transition comes at a moment when the world is changing faster than ever. While that can feel daunting at times, it is also exciting,” D’Amaro said earlier this year in a statement.

Perhaps cutting all woke propaganda sneaked into entertainment under Disney brands to indoctrinate children would also be a start toward regaining the trust of households that have gravitated to other studios for media consumption. 

Whether D’Amaro can stabilize Disney remains an open question.