Bob Iger confirms to expect three rounds of sales before summer – Deadline

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Disney CEO Bob Iger confirmed that the first of three rounds of layoffs will begin this week as the company looks to trim its workforce of about 7,000 employees.

The staff exec’s memo (read it below) tracks closely with the deadline exclusively reported last week — three rounds of cuts, the second set to be the deepest. This week’s first round comes just days before the company’s annual shareholder meeting on April 3. Iger first announced plans to downsize in February, describing it as key to achieving $5.5 billion in cost savings. The directors would finalize details of the new structure over the subsequent weeks.

“In challenging moments, we must always do what is required to ensure that Disney continues to deliver exceptional entertainment to audiences and guests around the world – now and long into the future,” Iger wrote in the memo.

Iger returned to the top role last November after stepping down in 2020 after serving 14 years as CEO. He faces a host of challenges in steering the media giant for a second time, including a much more negative macroeconomic climate and much greater skepticism on Wall Street about the economics of broadcasting. He has already dismantled the centralized distribution structure implemented by former CEO Bob Chapek and created three divisions of the company. All three departments – Gardens, Experiments and Products are expected to; entertainment; ESPN will be part of the layoffs. Sources said the entertainment division should see significant cuts to the business and content aspects of Hulu as well as sister studios ABC Signature and 20th Television.

The restructuring comes as the company is evaluating a number of strategic options. While Iger emphasized that ESPN will likely remain in the corporate fold, though it may offer a standalone streaming version in the not too distant future. Meanwhile, the CEO noted that all scripts are on the table for Hulu, which is operated by Disney but not wholly owned. Comcast’s 33% financial stake could be bought by Disney in early 2024, or Disney could decide to cancel the broadcast operation. An exit seems possible given Iger’s less than rosy comment recently about the prospects for streaming public entertainment.

Staffing cuts could be a boost to Disney shares, at least in the short term. As with many media stocks over the past year or more, Disney stock has hit hard times, losing about half its value since the summer of 2021. While the stock has rallied after Iger’s return, it has mostly moved sideways in recent months.

Here’s Iger’s full note:

Dear fellow employees,

As I shared with you in February, we made the difficult decision to reduce our total workforce by approximately 7,000 jobs as part of a strategic reorganization of the company, including significant cost saving measures needed to create a more effective, streamlined and streamlined approach to our work. Over the past several months, senior leaders have worked closely with HR to assess their operational needs, and I’d like to provide you with an update on these efforts.

We began this week notifying employees whose jobs were affected by the company’s workforce reduction. Leaders will break the news directly to the first group of affected employees over the next four days. A second, larger round of notices will occur in April with several thousand employee cuts, and we expect to begin the final round of notices before the start of summer to reach our goal of 7,000 jobs.

The hard reality of many colleagues and friends leaving Disney is not something we take lightly. This company is home to the most talented and dedicated employees in the world, and many of you bring a lifelong passion for Disney to your work here. This is part of what makes working at Disney so special. It also makes it more difficult to say goodbye to the wonderful people we care about. I would like to extend my sincere thanks and appreciation to each departing employee for your many contributions and dedication to this beloved company.

For our employees who have not been affected, I want to acknowledge that there will undoubtedly be challenges ahead as we continue to build the structures and functions that will enable us to be successful going forward. I ask for your continued understanding and cooperation during this time.

In challenging moments, we must always do what is required to ensure Disney continues to deliver exceptional entertainment to audiences and guests around the world – now, and long into the future. Please know that our HR partners and leaders are committed to creating a supportive and seamless process every step of the way.

I want to thank each and every one of you again for all of your many accomplishments here at The Walt Disney Company.

sincerely,

Bob