Disney We will begin enacting layoffs, implementing a targeted hiring freeze and limiting company travel as part of a comprehensive cost-cutting step announced for leadership on Friday.
In a note obtained by diverse, Which was sent to senior executives on Friday afternoon, Disney CEO Pop Network He wrote: “I am fully aware that this will be a difficult process for many of you and your teams. We will have to make difficult and uncomfortable decisions. But that is exactly what leadership requires, and I thank you in advance for stepping up during this important time. Our company has overcome many challenges during our extended history. 100 years, and I have no doubt that we will achieve our goals and create a company that is smarter and better suited to the environment of tomorrow.”
Chuckle says Disney will also conduct a “careful review of the company’s content and marketing spending,” with all of these efforts overseen by the newly formed “cost structure task force” made up of Chuckle and CFO Christina McCarthy and general counsel Horacio Gutierrez.
Layoffs and cost-cutting news hit four days after Disney’s introduction Almost Quarterly Earnings Resultswhich led to a decline in the company’s stock to Its lowest price in more than two years.
While the company saw subscriptions to Disney+, which launches its ad-supported level on December 8, vastly outpacing Wall Street expectations, Disney reported an operating loss for its streaming segment of $1.47 billion for the quarter ending October 1, 2022. , about 800 million dollars. More than the same period a year ago. Revenue increased 8% to $4.9 billion, which the company attributed to higher losses at Disney+ and ESPN+ and lower results at Hulu. Meanwhile, Disney’s Linear Television Network revenue (pay-TV and broadcast) declined 5% in the quarter.
Chapek wrote Friday that “cost management efforts,” which were hinted at by he and McCarthy in the earnings call and “occur against a backdrop of economic uncertainty” affecting all of Hollywood, “will help us achieve the important goal of reaching profitability.” for Disney+ in fiscal year 2024 and making us a more efficient and smarter company overall.”
Disney representatives did not immediately respond diverseComment request.
See Chapek’s full note below.
Disney leaders-
As we begin fiscal year 2023, I’d like to reach out to you directly about the cost management efforts that Christine McCarthy and I referenced on this week’s earnings call. These efforts will help us achieve the important goal of achieving Disney+ profitability in fiscal year 2024 and making us a more efficient and smarter company overall. This work is done against a backdrop of economic uncertainty that all businesses and our industry deal with.
While some macroeconomic factors are beyond our control, achieving these goals requires all of us to continue to do our part to manage the things we can control — most notably our costs. You will all have critical roles to play in this effort, and as senior leaders, I know you will fulfill them.
To be clear, I am confident in our ability to reach the goals we set, and in this management team to get us there.
To help guide us on this journey, I have created a Cost Structure Task Force of executives: our Chief Financial Officer, Christine McCarthy and General Counsel, Horacio Gutierrez. Together, this team will make the critical big picture decisions needed to achieve our goals.
We didn’t start this business from the beginning and have already laid out several next steps – you wanted to hear about them directly from me.
First, we conducted a rigorous review of the company’s content and marketing spending working with content leaders and their teams. While we will not sacrifice quality or the power of the unparalleled synergy machine, we must ensure that our investments are effective and bring tangible benefits to both the public and the company.
Second, we are limiting headcount additions by freezing target hiring. Recruitment will continue for a small subset of the more critical, business-oriented positions, but all other roles are on hold. Industry leaders and HR teams have more specifics on how to apply this to your teams.
Third, we review our SG&A costs and determine that there is room for efficiency improvement – as well as an opportunity to transform the organization to become smarter. This task force will lead this work in partnership with sector teams to achieve both savings and organizational enhancements. As we work through this evaluation process, we’ll look at every avenue of operations and employment to find savings, and anticipate some staff reductions as part of this review. In the near term, business travel should now be limited to essential trips only. In-person sessions or external locations that require travel will need prior approval and review from a member of your executive team (ie a direct report from the department head or company CEO). As far as possible, these meetings should be conducted approx. Attendance at conferences and other external events will also be restricted and will require approvals from a member of your executive team.
Our transformation is designed to ensure that we thrive not just today, but into the future – and you’ll hear more from our team in the coming weeks and months.
I am fully aware that this will be a difficult process for many of you and your teams. We will have to make difficult and uncomfortable decisions. But that is exactly what leadership requires, and I thank you in advance for stepping up during this important time. Our company has faced many challenges during our 100-year history, and I have no doubts that we will achieve our goals and create a smarter company that better fits into tomorrow’s environment.
Thank you again for your leadership.
-pop
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