Disney to cut 7,000 jobs in major revamp by Bob Iger
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STORY: Disney CEO Bob Iger announced plans on Wednesday to cut 7,000 jobs,
as part of an effort to save $5.5 billion in costs and make its streaming business profitable.
The layoffs represent an estimated 3.6% of Disney's global workforce
and will see the company restructure into three segments:
entertainment, theme parks, and a sports-focused ESPN unit.
Iger, who was reappointed as Disney's head in November, said streaming remained Disney's top priority.
Other new steps include a promise to reinstate a dividend for shareholders -
a key demand from activist investor Nelson Peltz who has accused Disney of overspending on streaming.
Dan Ives, senior equities analyst at Wedbush Securities, says Iger is keen to make his mark after his return to run Disney.
"This is Iger coming in with sharp knives because he needs to prove a point and I think Disney got way overdone in terms of hiring on the content side. //
"I think for Disney now, it’s really trying to have a successful streaming strategy with content that’s rationalized, making sure the parks don’t suffer because that is the cash cow of business and also ultimately activism is swirling around Disney."
The reorganization marks a new chapter in the leadership of Iger,whose first tenure as CEO began in 2005.
It also marks the company's third restructuring in five years.
However, Disney is just the latest media company to announce job cuts...
in response to slowing subscriber growth and increased competition for streaming viewers.
Warner and Netflix previously underwent their own layoffs.
