Disney to Lay Off 7k Employees

Facts

• On Wednesday, Walt Disney Co. announced plans for 7k layoffs – representing a 3.6% reduction in its global workforce – and a broad restructuring of the company in the aftermath of the release of its first quarterly results since the reinstatement of CEO Bob Iger.¹
• According to the company, it earned a better-than-expected $1.28B (70¢ per share) in the last three months of 2022, compared to $1.1B (60¢ per share) a year earlier.²
• The company is looking to save $5.5B by undergoing what Iger, who returned as CEO in November after two years away, called a “significant transformation.” One of Disney’s main focus areas will be making its streaming business profitable.³
• The Disney+ streaming service, which started in 2019, lost subscribers for the first time last quarter, dropping from 2.4M subscribers to 161.8M. It also recorded a $1.5B loss.⁴
• Disney will now be organized into three company units: Disney Entertainment, encompassing its streaming platforms and film studios; ESPN for sports coverage; and Parks, Experiences, and Products.⁵
• Iger also announced that executives in the entertainment unit will be responsible for picking which movie and TV projects to produce, as well as marketing and distribution.²

Sources: ¹Reuters, ²Associated Press, ³Independent, ⁴BBC News and ⁵Business Insider.

Narratives

• Republican narrative, as provided by Red State. It shouldn't be surprising that Disney is suffering, considering all the bad press it earned last year. Iger took over a company that fought and lost a culture war against Florida Gov. Ron DeSantis and has made its name synonymous with “woke” content. Disney used to be old-fashioned fun for the whole family, but now most average Americans are steering clear of the brand and its sinister agenda.
• Democratic narrative, as provided by Politico. Disney was predicated on being a morally instructive company and has long been esteemed as a model for a healthy civic society. Its recent so-called shift in content is merely a reflection of the nation's progressing culture, and GOP's accusation of woke nonsense attests to its inability to keep up with the mainstream.
• Narrative C, as provided by Forbes. Although Disney+ Hotstar took a hit in Southeast Asia because of the loss of Indian Premier League streaming rights, subscriber growth has been promising in the US and Canada. Streaming services are all facing stiff competition and are trying to find ways to stop finicky users from canceling and returning month to month. Disney+’s new, cheaper ad-based tier – in addition to its wide-ranging content – could help it grow toward the desired profits.