Disney layoffs expected to begin before annual meeting; Details of tracks emerge

EXCLUSIVE: With Disney’s April 3 shareholder meeting — a virtual affair this year — less than two weeks away, there is some clarity about the company’s plans to downsize and cut costs.

Insiders tell Deadline that several tracks are being prepared. The first is the target for next week, we hear. (March 30 or March 31 have been suggested as possible dates, but these have not been confirmed.) Sources say there will be a large wave at the end of April, called “the big one” or a “bloodbath”. with an expected bulk of the tracks.

There are different statements about a possible third round of layoffs. Some say it could come between late March and late April, while others note it could follow late April if necessary. Disney declined to comment.

Senior Disney executives have released details of the cuts in recent weeks. We’re hearing that most managers have already submitted their layoff target reports, the step companies are taking before a larger hiring initiative.

CEO Bob Iger revealed the extent of the cuts during the company’s quarterly call with Wall Street analysts on February 8. Plans to lay off 7,000 employees, about 3% of the company’s global workforce, “are not taken lightly,” Iger said. The staff reduction is a cornerstone of efforts to achieve $5.5 billion in overall cost savings.

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Following his promise to investors, Iger is determined to make an “announcement” in the coming weeks, an insider says.

The cuts are expected to be spread across the company’s three businesses: Entertainment; ESPN; and Parks, Experiences and Products — with marketing and distribution, including the defunct Disney Media and Entertainment Distribution unit, among businesses ripe for consolidation. Virtually every part of the major entertainment arena is expected to be affected in a significant way. There have been rumors of possible significant cuts at Hulu and sister studios ABC Signature and 20th Television, both on the business and content side. Despite widespread speculation about a possible merger of some form between the two major TV studios, it still doesn’t seem imminent.

ESPN, which is now a separate division, is also under scrutiny. While it has thinned its ranks in recent years as pay-TV distribution has fallen to about 74 million from a peak of 100 million households in 2011, the sports powerhouse also faces a steady rise in rights fees. Stephen A. Smith, one of ESPN’s top personalities, recently noted that the network “will face cuts.” He addressed the topic in a recent episode of his podcast know mercy, which is produced outside of Disney by Audacy’s Cadence13. “Hell, for all I know, I could be one of them,” mused Smith, who reportedly earns more than $13 million a year as host Take first, among many other roles. “Well, I doubt it. But it’s possible. Nobody knows.”

RELATED: Former Disney CEO Bob Chapek Earned $24 Million in Fiscal 2022; Bob Iger Comp made a total of $14 million when the company announced the latest executive salaries

At the time of last month’s earnings report, Iger said the $1 billion cost-cutting target was on track. A month later, speaking at a Morgan Stanley conference, he identified a specific area of ​​overlap that emerged under former CEO Bob Chapek. The marketing of streaming services has “decoupled” from the marketing of individual series or films. “It had to be reassembled, not only for reasons of common sense, but also because there are ways to reduce costs,” he said.

Disney is far from alone when it comes to moving out. Media and technology companies have laid off thousands of workers in the past tumultuous few months, with rising interest rates and currency fluctuations as economic headwinds.

Investors initially welcomed Iger’s revelation about rationalization and raising shares, but the stock has fallen in recent weeks. It closed at $96.54 on Tuesday and is up about 2% so far in 2023. Still, stocks aren’t much higher now than they were when they crashed in March 2020. This was shortly after Iger handed over the CEO role to Bob Chapek and Covid began covering almost all of Disney’s businesses.

Lynette Rice and Dominic Patten contributed to this report.