Disney to lay off 7,000 workers
Following a series of travails that put the company on course for its worst year since 1974, the Walt Disney Company announced Wednesday that it would cut 7,000 jobs as part of a broader effort to trim $5.5 billion in costs, as CNBC reports.
In addition to the layoffs, Disney declared its plans to reorganize into three distinct divisions, covering streaming/media, ESPN operations, and parks/experiences, respectively.
Disney overhaul announced
The substantial adjustments come just months after Bob Iger returned as to the company as CEO last fall and also amid a public proxy dispute with high-dollar investor Nelson Peltz through his Trian Management firm.
In announcing the changes coming to Disney during the company earnings call this week, Iger stated, “While this is necessary to address the challenges we're facing today, I do not make this decision lightly,” as Yahoo!Finance noted.
“I have enormous respect and appreciation for the talent and dedication of our employees worldwide, and I'm mindful of the personal impact of these changes,” Iger added.
The news of massive layoffs and cost cutting measures led to an immediate rise in Disney shares approaching 8%, with those gains settling at around 5% in after-hours trading.
As Market Watch noted late last year, the troubles facing Disney in recent months were exacerbated by disappointing box office returns from the company's release of Avatar: The Way of Water, though the outlet added that its other operational arms were still struggling to recover from pandemic disruptions at theme parks as well as cinemas.
In light of those difficulties, the Disney board ousted prior CEO Bob Chapek and reinstalled Iger in an effort to right the ship.
It was not long after that leadership shuffle that Iger made it known that a substantial shakeup was in the works, and that there would be a renewed focus on restructuring Disney's media division.
Iger outlined his vision in a memo to Disney employees soon after his return, and he pledged to place greater “decision-making back in the hands of our creative teams” and to “rationalize costs,” declaring that the company “is fueled by storytelling and creativity, and virtually every dollar we earn, every transaction, every interaction with our consumers, emanates from something creative.”
Conflicts over content
However, some critics – particularly on the conservative end of the spectrum – contend that many of Disney's woes stem directly from the creative trajectory on which the company has placed itself in recent years and that unless a course correction occurs, those problems are likely to persist, as Fox News notes.
Referencing the ideologically progressive nature of Disney programming in recent years and its strong emphasis on identify politics, screenwriter Matthew Betley mused on Twitter, “I actually wonder how much of these Disney layoffs are due to its creation of content that many parents feel is inappropriate for children.”
Doctor and former Republican Rep. Nan Hayworth also registered her suspicions about the cause of the media giant's recent challenges, tweeting, “Maybe Disney should try not portraying America as a land of bigots who are the product of a vile, tainted history, deserving of humiliation and Maoist-style re-education.”
As Fox News noted, British conservative commentator Nile Gardiner concurred, declaring, “'Woke Disney' isn't working. Disney will sink unless it returns to its traditional roots and rejects far Left ideology.”
Fighting with Florida
Disney's liberal storytelling and corporate culture has not just run afoul of media consumers, it has also stoked the ire of Republican Florida Gov. Ron DeSantis, who has taken a tough stance against the company in recent months amid a highly publicized battle over the state's Parental Rights in Education law, which opponents inaccurately labeled the “Don't Say Gay” law.
Determined to thwart Disney's effort to meddle in matters of public education in Florida, DeSantis first signed a bill eliminating the special self-governing status the company enjoyed in and around Orlando for decades and now appears poised to sign legislation that would give him the authority to appoint members of the board charged with overseeing that zone, formerly known as the Reedy Creek Improvement District, a power once held by Disney executives.
“The corporate kingdom has come to an end,” DeSantis spokeswoman Taryn Fenske said of the bill while it was still in the works. “Under the proposed legislation, Disney will no longer control its own government, will live under the same laws as everyone else, will be responsible for their outstanding debts, and will pay their fair share of taxes. Imposing a state-controlled board will also ensure that Orange County cannot use this issue as a pretext to raise taxes on Orange County residents.”
That success in addressing what many saw as Disney's overreach was heralded by conservative pundit Clay Travis, who said after the company's restructuring announcement, “One year after Ron DeSantis went to war with Disney, DeSantis won re-election by 19 pints, the largest victor in FL state history for a Republican governor, & Disney fired its CEO & just announced today it's firing 7,000 more employees. What a win for DeSantis & a loss for Disney. Get woke, go broke, y'all.”