Walt Disney Company just announced that they are laying off 7,000 employees, which is 3% of their global workforce. This is part of an effort to slash $5.5 billion in costs.
About 50% of the cost savings will come from a reduction in marketing and advertising, specifically for advertising their streaming services. This is a significant blow for Twitter and Facebook as Disney is one of their largest advertisers. Another 30% of the cuts will come from reducing the workforce and 20% from spending on content. The layoffs will be concentrated in media rather than in theme parks.
Disney’s Direct to Consumer [DTC] division, which runs Disney+, Hulu, and ESPN+, reported losing a staggering $4 Billion in losses in 2022. This includes a $1.5 billion loss in 2022 Q3 and another $1.1 Billion loss in Q4. Revenue per paid subscriber also decreased during 2022, with more people going for the cheaper options.
During the company’s 2022 Q4 earnings call, they said they believed the company would remain profitable in 2023 but would be vulnerable to any economic downturn.
Recently Walt Disney has been getting pushback for promoting radical far-left political agendas to children.