With the threat of an upcoming recession, Walt Disney draws first blood in the entertainment industry
The Walt Disney Company is set to reduce its workforce by several thousand next week, with around 15% of the staff in its entertainment division set to be affected. The cuts will be felt across the company, including in TV, film, theme parks, and corporate positions, and are expected to hit every region where Disney operates. Employees will begin to be notified from 24 April, although the company has so far declined to comment on the situation.
This move comes as part of a broader restructuring plan that Disney first announced in February of this year, in which it stated its intention to eliminate 7,000 positions from its workforce of more than 220,000 in order to reduce annual costs by $5.5 billion. The restructuring has affected the Disney Entertainment division, which was created this year to house the company’s movie and TV production and distribution businesses, including streaming.
As part of the restructuring, CEO Bob Iger has elevated key lieutenants, including Alan Bergman and Dana Walden, to co-chair Disney Entertainment. The company has been paring down its commitment to general entertainment, instead focusing on franchises and well-recognised brands. This is why the entertainment division will be a focus of the job cuts.
Disney’s decision to cut jobs is a result of the significant decline in revenue caused by the COVID-19 pandemic, which has forced the closure of its theme parks, resorts, and cruise lines. This has had a considerable impact on the company’s earnings, leading to job cuts across the board. However, despite the cutbacks, Disney continues to invest heavily in its streaming platform, Disney+, which has already gained over 100 million subscribers since its launch in 2019. The company plans to release a number of new titles exclusively on Disney+, including original movies and TV shows based on well-known franchises such as Star Wars and Marvel.
Disney’s focus on well-known brands and franchises is unsurprising, given the company’s track record of leveraging its popular intellectual property to create successful franchises. In recent years, Disney has released adaptations of its classic animated films, such as The Lion King, Aladdin, and Beauty and the Beast, which have proven highly successful at the box office. Additionally, the company’s Marvel Cinematic Universe and Star Wars franchises continue to expand, with multiple movies and TV shows in development.
Image :- Disney World at Florida, USA
It’s important to note that the cuts at Disney are not unique in the entertainment industry. Other major media companies, including Comcast’s NBCUniversal, Warner Bros. Discovery Inc., and Paramount Global, have also announced significant layoffs in recent months. This is due to a shift in investor sentiment on Wall Street, where the focus has moved away from subscriber growth in streaming to the high cost of operating online video platforms. As a result, companies have been forced to take a hard look at their operating costs and make tough decisions to reduce their workforce.
Despite the challenges posed by the pandemic, Disney remains one of the most iconic and successful entertainment companies in the world. With its focus on established brands and franchises, and continued investment in streaming, the company is well-positioned to emerge as a leader in the entertainment industry in the years to come.
