Disney to layoff 7,000 employees globally

New Delhi: Close on the heels of layoffs across large tech giants, the entertainment behemoth The Walt Disney Wednesday said it was cutting 7,000 jobs, globally.

The job cuts are a part of the company’s cost-savings plan and “strategic reorganisation” announced by CEO Bob Iger.

The job cuts amount to about 3% of the entertainment giant’s global workforce.

In a statement, Iger said Disney is embarking on a “significant transformation” that management believes will lead to improved profitability at the company’s streaming business.

"I do not make this decision lightly," Disney CEO Bob Iger said in an earning call after quarterly results.

In its 2021 annual report, the group said it employed 190,000 people worldwide, 80 per cent of whom were full-time.

"We are going to take a really hard look at the costs for everything that we make, both across television and film," Iger said explaining the Disney layoffs.

"Because things in a very competitive world have just simply gotten more expensive."

Disney is also going to look at the volume of content it makes and the pricing of its streaming services, Iger told analysts.

Iger also announced changes to how executives will operate Disney’s various divisions. Specifically, creative executives will now be responsible for determining what movies, TV series or other content to produce, as well as the marketing and distribution.

“Our new structure is aimed at returning greater authority to our creative leaders and making them accountable for how their content performs financially,” Iger said.

In its latest results, solid growth at Disney’s theme parks helped offset tepid performance in its video streaming and movie business.

The revenue of Disney grew 8% to $23.51 billion from $21.82 billion a year earlier, better than analysts’ expectations of $23.44 billion.

Iger, who stepped down as CEO in 2020 after nearly two decades, was brought back after the board of directors ousted his replacement Bob Chapek.

Iger's new stint as CEO is facing major headwinds, including a campaign by activist investor Nelson Petz who is demanding major cost-cutting after he said Disney overpaid to buy the 20th Century Fox movie studio.

Disney’s streaming service Disney+ saw a first-ever fall decline in subscribers last quarter.

The subscriptions stand at 161.8 million as on December 31, down one per cent from the previous quarter.

Disney+’s struggles come as its archrival Netflix has emerged from its own rough patch and announced a solid boost in new subscribers for the end of last year.