Disney will eliminate 7,000 job positions as streaming usage declines

7,000 jobs will be eliminated, according to Disney CEO Bob Iger, as part of a significant restructuring of the entertainment juggernaut.

The layoffs are a part of a strategy to save $5.5 billion and turn Disney+ into a profitable streaming service after it recorded its first subscriber decline since 2019. In his own words, Mr. Iger "did not make this decision lightly." Additionally, he presented the first set of financial figures since his return to the organization in November, which showed Disney+'s ongoing losses.

The job reductions represent about 3.6% of Disney's global workforce. Between October and December of last year, Disney reported an 8% increase in sales to $23.5 billion. Profit increased up to 11% to $1.3 billion. But Disney+ reported a $1.5 billion loss, and its subscriber base dropped by about 2.4 million to 161.8 million. According to the strategy, the business will be divided into three segments: Disney parks, experiences, and products; sports-focused ESPN; and entertainment, which includes movies, television, and streaming services.

Following the news, Disney's stock price increased by more than 5% in extended trading. The modifications respond to some of the complaints made in recent months by activist investor and billionaire Nelson Peltz, who accused Disney of overspending on its streaming business.