Disney announces layoff of 7000 employess amidst the declining revenue and loss of subscribers
Disney has planned to lay off 7000 employees across various sectors of the company. The mass media and entertainment-based company have declared that it plans to undergo a restructuring process and reduce the workforce to minimize costs. The company decided after Disney revealed its quarterly earnings for its fourth quarter.
Disney has taken the same steps as the global giants amidst the volatile global macroeconomic condition. The reports have stated that Disney initiated the restructuring process as soon as the company’s CEO Robert Iger, undertook the position of the former CEO Bob Chapek in the previous year.
Iger took over the company’s CEO position for 15 years before he stepped down from CEO in 2020. However, the company has started with structural changes, including the process of reduction of job cuts.
The official release by Disney about its quarterly earnings has shown that the company has witnessed a slowdown in subscribers’ growth rate, compared to its rival Netflix.
What made the situation severe is that the streaming platform DisneyPlus Hotstar has added around 20,000 customers in Canada and the U.S., bringing the count to 46.6 million subscribers.
At the same time, Hotstar has visualized an increase of 1.2 million customers in the last year. However, other platforms like ESPN Plus and Hulu have experienced moderate growth in the number of subscribers, with 800,000 and 600,000 new subscribers, being added to the platform respectively.
The recent layoffs have been announced by Robert Iger after he talked with the analysts on a call about the company’s quarterly earnings. He has stated that he has not taken the decision lightly and has enormous appreciation and talent for the employees working globally.
He has further asserted that Disney would save the cost by 5.5 billion USD across the company, and the layoffs will enable the company to achieve the goal.
In addition, Iger has talked about the company’s priorities. Enduring the growth and profitability of the business is one of the goals for the company. Predictions have been made to show that Disney Hotstar will achieve high profits by the end of fiscal 2024, and it has become a goal for the company to achieve it.
However, he has not mentioned the sectors which will be impacted by the layoffs.
Based on the restructuring of the company, Disney has revealed that the changes will take place in three divisions, including Disney Entertainment, ESPN, and Experience and Production units.
DisneyPlus to become ‘Disneyminus’ amidst global recession:
Disney has released its results for the first quarter of 2023, showing that the company has barely gained any new subscribers in North America while losing millions of customers in the global market.
In the Indian market, the streaming platform lost 2.4 million subscribers at the end of 2022, accounting for a 1 percent decline from the last year.
The streaming platform has experienced a massive loss after being functional in 2019.
The decline in subscribers has even led to a decline in revenue in North America. The company has visualized a slump of 2 percent in the average monthly revenue per subscriber, accounting from 6.10 USD to 5.95 USD.
The company has declared that the results for Disney were mostly due to the increasing programming and production costs but, the revenue was majorly impacted by the loss of subscribers.
The company’s total operation has visualized an 8 percent increase in the previous year, but the increase in original content has cost more money for the company more.
As a result, the company has taken several measures to reduce the headcount.
Previously, the largest music streaming platform Spotify Technologies has reduced 6 percent of its workforce and would charge 50 million USD, adding to the massive layoffs in the tech industry.
Due to the challenging economy, another video-streaming platform named Vimeo announced it would be laying off 11% of its workforce. The 11% team size reduction at Vimeo was announced previously, according to CEO, Anjali Sud. This very difficult choice will affect people’s livelihoods and spirits in these already challenging times. Additionally, it is the right decision to help Vimeo become a more focused and successful business by exercising the necessary restraint in a volatile economic climate.
edited and proofread by nikita sharma
