Disney Layoffs 2022 - Disney prepares to cut jobs, according to a leaked note from the CEO / Like many other companies, the company is also trying to cut costs by reducing the workforce. He's also considering a hiring freeze and slowing down travel.
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Disney Layoffs 2022
Disney CEO Bob Chapek expects "some job cuts" after the company revised his spending, according to a leaked memo posted by CNBC. The company will also reportedly freeze most of its hiring, hiring new employees only for "the most important and company-leading positions."
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If Disney completes a round of layoffs, it will be far from the only one of the companies going after streaming services. Dozens of workers have lost their jobs at Warner Bros. Television and HBO Max this year. Netflix has also laid off hundreds of employees this year as it reported slowing subscriber growth, but noted during its latest earnings call that its business remains profitable, unlike its premium streaming rivals, which include Disney.
So far, there are no details on how many employees might be affected, as Disney will begin by building a "cost structure workforce" to look into its finances. However, the prospect of layoffs diminished after Tuesday's earnings call, when CFO Christine McCarthy said Disney "is currently actively evaluating our cost base and we are exploring significant efficiencies."
The company is tightening its belt in other ways too, with Chapek's memo telling employees to conduct business meetings virtually when they can to cut travel expenses.
Last quarter, Disney added millions of subscribers to its streaming services like Disney Plus, ESPN Plus and Hulu. However, even after raising prices and driving many people to opt for a broader bundle of entertainment services, it is still losing money on its direct-to-consumer business as it spends millions on creating accessible content for customers. . Last quarter, it lost nearly $1.5 billion on its streaming efforts — those elegant Andor sets and costumes don't come cheap.
Disney Planning Hiring Freeze, Possible Layoffs
Outside of entertainment, the tech world has seen some brutal cuts: Meta and Twitter have fired thousands of people in the last week alone, while Amazon has instituted corporate hiring freezes. In recent months, Snap, Microsoft and many Others During his earnings call with investors, CFO McCarthy said Disney plans to aggressively revise and cut spending.
Several big tech companies have announced layoffs and other cost-saving measures in recent weeks. It looks like Walt Disney could be the next company to do just that. He started to take different measures to save costs as Walt Disney has been reporting losses for a long time.
According to Reuters, the company fired its CEO Bob Chapek and rehired Bob Iger to help restore profits and grow the business. Iger assumed leadership of Walt Disney in 2005, and during his 15-year leadership, Disney bought the entertainment companies Marvel and Fox as well as other businesses. He also helped launch the Disney+ streaming service, later billed as Disney+ Hotstar in India, in partnership with Star India.
Iger was hired for just two years and with his return the company expects better results and profits. PP Foresight analyst Paolo Pescatore said, "The bold move (Iger's return) may seem like the right one. However, the business is in a different stage of development" and that some steps will be taken, including "limiting some operations". . . ,
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Streaming service Disney+ is said to be one of the companies that will be hit the hardest. That's because the segment has reportedly lost more than $8 billion over the past three years.
The latest development comes days after Walt Disney announced lower quarterly profit and a $1.5 billion quarterly loss on its streaming business. During his earnings call with investors, CFO McCarthy said Disney is planning to aggressively review spending and cut it, and that "some of that will provide some short-term savings." And others will bring long-term structural benefits. "
The WSJ recently reported that Disney+ has communicated internally to managers that the layoffs are imminent. Some austerity measures will be taken, including restrictions on business travel. The company is also reportedly planning to freeze hiring for most departments and will only be open for a few key positions.
We use cookies for analytics, advertising and to improve our site. By continuing to use our site you agree to our use of cookies. To find out more, see our Cookie Policy and Cookie Settings. Disney's OKShare (NYSE:DIS) has come under pressure in recent days after an internal memo leaked showing the entertainment giant plans to freeze hiring and ax untold numbers of people. number of jobs. In the memo, CEO Bob Chapek explained:
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“We are limiting headcount growth through a targeted hiring freeze… As we work through this evaluation process, we will review every opportunity in operations and manpower for savings, and anticipate some headcount reductions as part of this review.”
The company also plans to create "a cost structure task force" to oversee spending among its 190,000 employees. In particular, spending on content and marketing by the task force will be affected.
In the short term, job cuts can provide lower spending and higher net income. However, in the long run, adding jobs and employees stimulates growth and innovation.
The memo follows a disappointing third quarter in which Disney's streaming division posted an overall loss of $1.47 billion, up from a $630 million loss a year earlier.
Bob Chapek To Start Layoffs At Disney To Cut Costs
Contributor William White also said that Entertainment missed earnings per share (EPS) and "more problems could come." The company attributed some of the losses to the lack of theatrical release. On the bright side, the marketing spend appears to be paying off, as Disney has signed up 12.1 million new Disney+ subscribers.
It's clear that Disney is having a tough time, even if DIS stock is by no means a bad investment. As the macroeconomic situation improves, investors should expect DIS to pick up as well.
As of the date of publication, Eddie Pan held no position (either direct or indirect) in the securities referenced in this article. The opinion expressed in this article is that of the author, subject to publication guidelines.
Eddie Pan specializes in institutional investing and insider trading. He writes for the TODAY Markets team, which focuses on the latest news related to popular stocks.
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