Walt Disney Company has announced that it plans to cut around 7,000 jobs as part of a major structuring. The move comes alongside the news that its streaming service Disney+ lost subscribers for the first time since its launch in November 2019.
Speaking in a call accompanying the company’s latest results, CEO Bob Iger said that it plans to return power to its creative teams, who will “determine what we’re making, how it’s monetised and how it gets marketed”.
He added that the strategic restructuring, implemented immediately, will see Disney split into three core business segments, namely Disney Entertainment, ESPN and Parks, Experiences and Products. This should result in cost savings of $5.5 billion, with $2.5 billion being in non-content and $3 billion in content, excluding sport, over the next few years.
Iger also said that in keeping with other companies Disney will no longer be providing long-term subscriber guidance. In addition, he said that Disney+ remains on target to hit profitability at the end of fiscal 2024.
Disney’s latest results show that Disney+ had a total of 161.8 million subscribers at the end of 2022, down from 164.2 million (-1%) three months earlier. This was largely down to a 5% loss at Disney Hotstar (down from 61.3 million to 57.5 million), with US and Canada stable (46.6 million at the of 2022) and international, excluding Hotstar, growing by 2% to 57.7 million.
The company notes that results at Disney+ reflected higher programming and production costs and increased technology costs, partially offset by higher subscription revenue and a decrease in marketing costs. The increase in programming and production costs was attributable to more content provided on the service and higher average costs per hour, which included an increased mix of original content. Higher subscription revenue was due to subscriber growth, partially offset by an unfavourable foreign exchange impact.
