Daily Management Review

Disney announces restructuring, cuts 7,000 jobs


Walt Disney Co. announced a significant reorganization led by newly reinstated CEO Bob Iger. To save $5.5 billion and turn a profit on streaming services, the firm will lay off 7,000 workers.

According to estimates, the announced reductions will affect 3.6% of Disney's overall staff.

The planned actions addressed some of the issues raised by activist investor Nelson Peltz, including that Disney is overspending on streaming services and has promised to resume dividend payments to shareholders.

A representative of Peltz's Trian Group, which is owned by Disney, said in a statement on Wednesday night, "We are happy that Disney is listening."

The company will restructure its business into three segments: the entertainment division, which will include the film, television, and streaming businesses; the ESPN sports programming division; and Disney's parks, experiences, and products business. This restructuring is part of a strategy to reduce costs and give creative executives more control.

Iger said on a conference call with investors that the reorganization will result in a more integrated and cost-effective approach to our operations. - "We're determined to manage our company effectively, especially in this difficult situation."

source: cnbc.com