Newly reinstated CEO Robert Iger is clearing the decks at Disney, announcing plans to sack 7,000 workers, amidst a corporate restructuring aimed at cutting costs by A$7.9 billion.
This amounts to 3.6 per cent of the company’s global workforce, and comes as the entertainment giant delivers lacklustre first-quarter net income of A$1.85 billion, well below the expected target of A$2.06 billion.
It also lost subscriber numbers at Disney+, although this wasn’t necessarily a bad thing, as Iger explained in an earnings call.
“The streaming business, which I believe is the future and has been growing, is not delivering the kind of profitability or bottom-line results that the linear business delivered for us over all over a few decades,” Iger told investors overnight.
“And so we’re in a very interesting transition period, but one, I think, is inevitably heading towards streaming.”
Iger noted the “global arms race for subscribers” resulted in the company initially pricing Disney+ too low
“In our zeal to go after subscribers, I think we might have gotten a bit too aggressive in terms of our promotion”, which he notes “wasn’t absolutely necessary”, given the slight loss of subscribers once the company increased pricing.
This round of cuts pales in comparison to the 32,000 workers laid off in November 2020. This was shortly after Iger first stood down from the CEO role, into which he was reinstated last November.
