Disney is laying off 7,000 employees

Bob Iger, in his first earnings presentation since returning to the company, announced this The Walt Disney Company lays off 7,000 employees As part of an additional effort to save $5.5 billion in costs.

Disney needs to rein in costs and increase profits as it continues to lose money from its online streaming business, which includes Disney+ and Star+. “After a strong first quarter, we have embarked on a significant transformation, which will further expand the potential of our global creative teams, brands and franchises,” Iger said in a statement.

“We believe the work we’re doing to reshape our business is about being creative, while reducing expenses, and driving sustainable growth for our broadcast business investment. We’re positioning ourselves to face Future turmoil and global economic challengesand delivering value to our shareholders.”

Disney+ streaming service I lost 2.4 million subscribers During the first quarter, that led to a total of 235 million users of Disney’s streaming apps (Disney+, Hulu, and ESPN+). These numbers show that Disney’s streaming business continued to lose money, adding to more than $1 billion in losses during the three months ending in December.

However, Disney reported that its profits and revenues beat Wall Street estimates. The company achieved sales of $23.5 billion, up 8% from the same quarter of the previous year.

Analysts had expected revenue of $23.4 billion. Disney’s profit was $1.28 billion, up 11%. Shares of the entertainment giant came in at 99 cents a share, beating expectations of 78 cents, gaining 2% in after-hours trading.

Disney’s latest earnings report turned out to be a pivotal moment for the company. Bob Chapek, CEO at the time, broke the news of Disney+’s sharp increase in subscribers, but that masked the underlying issues: Disappointing earningsincluding at great amusement parks, and huge losses in the company’s broadcast business.

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During the fourth quarter, streaming lost a staggering $1.5 billion. Chapek was abruptly fired in November by the board of directors, bringing Iger back to run the company for the next two years.

Disney war

While Wall Street and staff welcomed Iger back, they are on the table important challengesincluding the need to profit from the flow, an action that Egger passionately defended.

The announcement of the layoffs was expected because Disney needs to cut costs in the coming months. Iger imposed too Mandatory return to work policywhich requires hybrid employees to be in the office four days a week.

Influential investors interested in business development arise around Iger.

Billionaire investor Nelson Peltz, of Peltz’s investment fund Trian Fund Management, owns a $900 million stake in Disney and has been pressing the company for a seat on its board because he believes it is necessary to plan for injuries, including improper succession and acquisition planning. on 21st Century Fox.

Peltz’s proposals have been heard by other investors, and if his offer to serve on the board is rejected, he intends to encourage shareholders to vote for him (or his son Matthew). The current board of directors is campaigning hard against Peltz, accusing him of being out of his depth when it comes to the media and entertainment business.

Disney recently named former Nike CEO Mark Parker as its next president, who will head the planning committee to find Iger’s replacement. During Iger’s first fifteen years as CEO, he delayed his retirement several times and was the one to choose Chapek as it happensr , a decision he soon regretted.

Parker replaces Susan Arnold, who has just retired He has served on the Board of Directors for the past fifteen years. The battle will come to a head in early April when Disney holds its annual shareholder meeting virtually, where investors will vote on the 11-member board of directors currently run by Disney.

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