Prepare for the carnage: Disney layoffs continue Monday

It was originally described as the “Big One” or, more specifically, an outright “massacre.”

Either way, the bulk of the layoffs at Disney are expected to begin Monday. On April 24-27, Mouse House film and television employees will lose their jobs daily (except Friday), we hear. A Disney representative declined to comment.

To say anxiety is high is an understatement. Virtually everyone who works on Burbank’s Buena Vista Street is on high alert, wondering if their number has run out.

“There is an ominous feeling that the cuts will be widespread, extensive and very significant,” said an industry source, noting how low company morale is at the moment amid persistent rumors that at least one person of every going to leave the department.

The sweeping layoffs are among the first major steps for Bob Iger since his surprise return as Disney CEO in late November.

“To be honest, it’s bad,” said a longtime film executive at the company. “Iger’s return gave everyone hope for investment in people and creativity. The truth is, if you’re not riding the parks, you might be on the chopping block. Perhaps the worst is still not knowing who will be released, no matter how much time you invest.”

One employee even asked a deadline reporter to find out if his job was safe.

“Pray for me,” wrote another.

Iger confirmed in March that there would be three rounds of layoffs as the company plans to reduce its workforce by about 7,000 employees for a total of $5.5 billion in cost savings. The first round came days before the company’s April 3 annual meeting and included a merger of production operations at Disney TV Studios, Hulu, Freeform and FX, and the closing of the studio’s Creative Acquisitions division. (A small business unit focused on exploring the metaverse was also discontinued.)

The second, much larger wave of layoffs next week will bring Disney close to the 7,000 target, we hear. Virtually every entity of Disney Entertainment — television networks and studios and movie studios — is expected to be significantly affected. According to sources, cost targets have been set for the various department heads. This translates into different percentages of staff for each entity, which in some cases can be as high as 5%, as high as 10%, 15%, and even more, we hear.

Network programming and studio marketing are believed to be among the areas that will take a hit this time, and there will be another round of cuts at ABC News (which was already fired last month), sources said. The remnants of the defunct Disney Media and Entertainment Distribution are also an obvious target.

And then there’s Hulu.

The streaming-focused portions of the company are particularly strained amid growing intrigue over Disney’s plans for Hulu, especially as it contributed to $1.5 billion in total streaming losses last quarter. The company took full operational control of Hulu in 2019, but Comcast still has a 33% financial stake. Disney could buy Comcast in a “sit/call” deal that would take effect in early 2024, but Iger recently said “everything is on the table.” The agreement stipulates that Hulu’s minimum value at the time of a transaction will be $27.5 billion. That means Disney will have to commit to spending at least $9 billion while also scaling back and planning to reinstate its stock dividend after it was suspended during Covid.

“Hulu is definitely going to be a place to watch with these clips,” notes an executive at another media company. “Since they’ve taken over, they’ve only kept it in the US and run it pretty conservatively, which means it’s either beamed to Disney+ or they can just let it go completely. My money is on the former, but it means they can use it much more efficiently.

Heralding things to come, Joe Earley was promoted this month from his role as president of Hulu to broader oversight of direct-to-consumer streaming at Disney Entertainment. Michael Paull, a former Amazon veteran whose six-year Disney run follows the company’s acquisition of BamTech, which Paull served as CEO when it was still owned by Major League Baseball, was the leader of that mix . “There was no room for Michael in the new structure,” said a former Disney executive.

ESPN, now one of the company’s three business units — a new structure implemented under Iger after he took over from Bob Chapek — will also come under scrutiny for budget cuts. One big problem: Disney and ESPN face an upcoming multi-billion dollar NBA rights renewal. While other elite professional sports such as Major League Soccer are in ongoing talks with Apple, an executive who negotiates sports rights deals says the leagues prefer to maintain the kind of cash flow they get from more traditional licensing deals.

“Why do you think MLB sold BamTech in the first place? They didn’t want to be in the direct-to-consumer business,” says the managing director. “For Disney, they put their chips in the middle of the table by introducing BamTech. However, in this environment they have to rethink their costs of running all this infrastructure while trying to keep money available for rights.”

That “hard look” is likely to cost veteran workers their jobs next week, with former ESPN anchor Bonnie Bernstein lamenting the impending layoffs on Twitter.

“I love our industry. It has brought so many great things into my life. But my heart aches for my friends at ESPN/Disney as we wait for the next round of cuts,” she said. wrote. “Many have been with us for 20 or 30 years. That’s all they know. The fear of “what’s next” for life workers in any industry…so loud.

Dominic Patten contributed to this report.