Disney World celebrated its 50th anniversary in April 2022.
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Disney said Wednesday it is planning to reorganize into three segments, while also cutting thousands of jobs and slashing costs.
The media and entertainment giant said it would now be made up of three divisions:
- Disney Entertainment, which includes most of its streaming and media operations
- An ESPN division that includes the TV network and the ESPN+ streaming service
- A Parks, Experiences and Products unit
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The move marks the most significant action Bob Iger has taken since returning to the company as CEO in November. Disney announced the changes minutes after it posted its most recent quarterly earnings.
On Wednesday, during its quarterly earnings call with investors, Disney also announced it would be cutting $5.5 billion costs, which will be made up of $3 billion from content, excluding sports, and the remaining $2.5 billion from non-content cuts. Disney executives said about $1 billion in cost cutting was already underway since last quarter.
Disney also said it would be eliminating 7,000 jobs from its workforce. That would be about 3% of the roughly 220,0000 people it employed as of Oct. 1, according to an SEC filing, with roughly 166,000 in the U.S. and about 54,000 internationally.
Disney’s stock rose more than 8% in after-market trading.
Media companies, such as Warner Bros. Discovery, have been pulling back on content spending and looking to make their streaming businesses profitable. Heightened competition has led to slowing subscriber growth, and companies have been looking to find new avenues of revenue growth. Some, like Disney+ and Netflix, have added cheaper, ad-supported options.
The reorganization has been underway since Iger returned to the helm of Disney, replacing his hand-picked successor Bob Chapek.
Chapek’s removal came shortly after Disney had reported its fiscal fourth quarter earnings, disappointing on profit and certain key revenue segments. Chapek had also warned that Disney’s strong streaming numbers would taper off in the future. He had also told employees shortly thereafter that Disney would be cutting costs through hiring freezes, layoffs and other measures.
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