Disney's third round of layoffs: Over 2,500 to be affected
What's the story
A third wave of layoffs has hit The Walt Disney Company. This time, over 2,500 employees across the board are expected to receive the pink slip. The company will inform affected staffers this week. The previous rounds of terminations took place in March and April. The latest is touted to be the last significant round of cuts.
Context
Why does this story matter?
Layoffs have become a common phenomenon over the past year. However, only a handful can claim they have had three rounds of job cuts. For Disney, the axings are part of a massive quest to revamp the company that started after Bob Iger returned as the CEO. The entertainment giant hopes Iger's measures will make it the powerhouse it once was.
Layoffs
The layoffs will affect different divisions across the company
Like the first two rounds of job cuts, the third wave is expected to affect different divisions in Disney. However, it is unclear which divisions will be hit the most. According to IANS, the company's Parks and Resorts division will be untouched. The entertainment division, which houses the firm's TV production, movie, and distribution business, will also see fewer cuts.
Total number
Iger announced roughly 7,000 job cuts in February
In February this year, Iger announced Disney would fire around 7,000 employees in three rounds in an attempt to cut costs. The latest round is expected to bring the total number of terminations to around 6,500, close to the figure Iger said. The terminations will make up 30% of Disney's $5.5 billion annual cost reduction target.
Cost-cutting
Disney has removed content from its streaming platforms
Out of the $5.5 billion, 50% will come from the reduction in marketing expenses and the remaining 20% from decreased spending on technology, procurement, etc. The company has also begun withdrawing titles from its streaming platforms as part of cost cuts. Disney's streaming platforms have been witnessing a slowdown. The firm plans to deal with the slowdown by cutting content and trimming the payroll.
Previous rounds
The company fired around 4,000 employees in previous rounds
The first two rounds of layoffs at Disney saw around 4,000 employees lose their jobs. In the first wave, the company fired employees in its metaverse strategies unit and Beijing office. The second round was more extensive. Recently created Disney Entertainment saw 15% of its staff axed. Other affected divisions include ESPN and Disney Parks, Experiences and Products.
Other companies
Writers' strike has affected media companies like Disney
The news about Disney's latest round of layoffs comes amid the ongoing strike by Hollywood writers. Film and TV writers stopped working after they failed to reach an agreement with companies like Disney, Netflix, and Warner Bros, among others. Writers are asking for an increase in pay and a change to work rules. If an agreement is not reached, companies' struggles will amplify.