(CTN News) – Upon completion of the latest round of layoffs, Disney will have lost 4,000 employees in recent weeks, bringing the total number of layoffs to 4,000.
The company announced earlier this year that it would cut 7,000 jobs from its workforce as part of a reorganization that will result in a $5.5 billion cost reduction. Bob Iger announced the news during his first earnings call after returning to the role of CEO.
The departure of so many colleagues is not taken lightly by Disney officials.
This represents about 3% of the approximately 220,000 employees Disney employed as of Oct. 1, with roughly 166,000 in the United States and about 54,000 abroad.
In a first round of layoffs, Disney notified employees on March 27 that some of its metaverse strategies unit and some of its Beijing staff would be affected.
A note from co-chairmen of Disney Entertainment, Alan Bergman and Dana Walden, reads, “The senior leadership teams have been working diligently to define our future organization, and our main focus has been on getting this right, rather than getting this done quickly.”
Disney Entertainment, ESPN, and Parks, Experiences, and Products are expected to be affected by the second round of cuts.
The affected jobs will be situated throughout the country, beginning in Burbank, California, and continuing to New York and Connecticut. Earlier this week, CNBC reported that ESPN plans to lay off employees in the near future.
The company will eliminate off-camera employees in the first three rounds of cuts, and will conduct a separate talent evaluation over the summer, which will result in additional cuts and non-renewals of contracts, according to a person familiar with the matter. In this round of layoffs, ESPN is expected to eliminate less than 100 positions.
The ESPN CEO Jimmy Pitaro wrote in a note to employees obtained by CNBC that, as a core segment of Disney, with operational control and financial responsibilities, the company must continually identify ways to improve efficiency and be more nimble.
“We will act with compassion, respect for our colleagues, and professionalism during this difficult time.”
As part of its plan to reach the 7,000 target, Disney expects to begin its third round of layoffs before the beginning of the summer.
It has previously been stated by that it does not expect layoffs to affect its hourly workers at its parks and resorts.
Iger announced earlier this year that Disney would reduce its costs by $3 billion in content expenses, excluding sports, and by another $2.5 billion in noncontent expenditures.
It was at that time that Disney executives announced that approximately $1 billion in cost-cutting had already been accomplished since last quarter.
In order to turn their streaming businesses profitable, media companies have been cutting back on content expenditures as well as spending in general.
Additionally, the reorganization occurred while Disney was engaged in a proxy fight with Nelson Peltz and his firm Trian Management. In response to Peltz’s announcement, his proxy war was called off shortly thereafter.