Walt Disney Co. begins 7,000 layoffs

Job cuts part of an effort to save $5.5 billion in costs and make money-losing streaming business profitable

Walt Disney Co. on Monday began 7,000 layoffs announced earlier this year, as it seeks to control costs and create a more “streamlined” business, according to a letter Chief Executive Bob Iger sent to employees and seen by Reuters.

Several major divisions of the company – Disney Entertainment, Disney Parks, Experiences and Products, and corporate – will be impacted, according to a person familiar with the matter. ESPN is not touched by this week’s round of cuts, but is anticipated to be included in later rounds.

The entertainment industry has undergone a retrenchment since its early euphoric embrace of video streaming, when established media companies lost billions as they launched competitors to Netflix Inc.

Media companies started to rein in spending when Netflix posted its first loss of subscribers in a decade in early 2022, and Wall Street began prioritising profitability over subscriber growth.

Mr. Iger said Disney would begin notifying the first group of employees who are impacted by the workforce reductions over the next four days. A second, larger round of job cuts will happen in April, “with several thousand more staff reductions.” The final round will start before the beginning of the summer, the letter said.

The Burbank entertainment conglomerate announced in February that it would eliminate 7,000 jobs as part of an effort to save $5.5 billion in costs and make its money-losing streaming business profitable.

“The difficult reality of many colleagues and friends leaving Disney is not something we take lightly,” Mr. Iger wrote, noting that many “bring a lifelong passion for Disney” to their work.