Dhe entertainment giant Walt Disney is planning significant staff cuts despite good business in the past quarter. Around 7,000 jobs — about 3 percent of the global workforce — are to be cut as part of a program designed to reduce annual costs by $5.5 billion. This was announced by Disney boss Bob Iger on Wednesday evening. Investors allowed the stock to rise by around eight percent in after-hours trading.
In view of “global economic challenges”, Iger announced a major restructuring of the company. Disney recently earned better than expected: In the three months to the end of December, profits increased by eleven percent year-on-year to $ 1.3 billion (1.2 billion euros). Revenue grew eight percent to $23.5 billion. Disney exceeded the forecasts of Wall Street experts.
Disney+ subscriber numbers falling
However, the group lost subscribers to its most important streaming service Disney + after significant price increases. At the end of the quarter, the video service that competes with Netflix had 161.8 million users worldwide – a good one percent fewer than three months earlier. Disney’s other streaming services, Hulu and ESPN+, posted modest gains. In addition, the division’s loss of $1.1 billion was lower than feared. In the previous quarter, the minus was $ 1.5 billion.
With the announced layoffs, the entertainment giant joins similar decisions by other big tech companies. The background is almost everywhere the declining demand due to the economic crisis. In addition, many tech companies hired massive numbers of people during the corona pandemic – this development is now being reversed.
Disney employed 190,000 people that year, according to its 2021 annual report.