Disney CEO Bob Chapek predicts “some layoffs” after the company reviews its spending, according to a leaked memo published by CNBC. The company will also reportedly freeze most hiring, only placing new hires for “the most critical business driving positions”.
If Disney does end up making layoffs, it won't be the only thing the streaming service company has done. Dozens of workers have lost their jobs at Warner Bros. Television and HBO Max of the year.
Netflix has also laid off hundreds of employees this year while reporting slower subscriber growth but noted during its last earnings call that its business remains profitable, unlike its premium streaming competitors, including Disney. Chapek predicts that the service will be profitable by the end of 2024.
There are no details yet on how many workers may be affected, as Disney will start by setting up a “cost structure task force” to handle its finances. However, the prospect of layoffs loomed after Tuesday's earnings call when CFO Christine McCarthy said Disney was “actively evaluating its current cost base, and we are looking for meaningful efficiencies”.
The company is also tightening its belt in another way, with a Chapek memo telling employees to conduct business meetings virtually if they can to cut down on travel costs.
Disney added millions of subscribers to its streaming services like Disney Plus, ESPN Plus, and Hulu in the last quarter. However, even after increasing prices and encouraging many people to choose more expensive entertainment service plans, direct-to-consumer businesses are still losing money spending millions of dollars to create content that will keep customers coming.
Beyond entertainment, the tech world has experienced several mass layoffs: Meta and Twitter have laid off thousands of people in just one week, while Amazon instituted an enterprise hiring freeze.