Disney is planning to lay off 7,000 workers to cut costs across the company. CEO Bob Iger announced the news in an earnings call on Wednesday, stating that the move is ânecessary to address the challenges weâre facing today.â
Like many other companies across the country, Disneyâs making the changes as part of its efforts to reduce costs in a âchallenging economic environment.â
Iger says heâs âtargeting $5.5 billion of cost savings across the companyâ and that the layoffs will âhelp achieve this.â
Iger didnât say which departments the layoffs will affect.
Iger still has his sights set on streaming despite a slowdown in subscriber growth.
Disney Plus added just 200,000 subscribers in the US and Canada for a total of 46.6 million, while its international offering (excluding HotStar) saw the addition of 1.2 million members.
Hulu and ESPN Plus had similarly slow growth, with each adding 800,000 and 600,000, respectively.
It seems streaming services aren’t what Wall Street believed it was going to be.
AMC Entertainment CEO Adam Aron recently praised Disney for scheduling Stephen Kingâs âThe Boogeymanâ to be released theatrically on June 2nd, 2023.
The film was originally planned to be released on the streaming service Hulu.
âTheatres beat streamers! We salute producer 21Laps and our friends at Disney for this decision. The Boogeyman, a Stephen King adaption, was made for Hulu. But it tested so well, Disney is releasing it theatrically instead. Thank you Bob Iger, Alan Bergman, Justin, Tony, and Ken,â said Adam Aron on Twitter.
$1.5 Billion in Losses
Disneyâs direct-to-consumer division, which includes its streaming services, saw a 13 percent increase in revenue to $5.3 billion.
But it still had an operating loss of around $1.1 billion, which the company attributed to higher costs at Disney Plus and Hulu.
The companyâs streaming business lost around $1.5 billion last quarter.
âOur priority is the enduring growth and profitability of our streaming business,â Iger says.
âOur current forecasts indicate Disney Plus will hit profitability by the end of fiscal 2024 and achieving that remains our goal.â
Shares of the company remained unchanged, in fact, The Walt Disney Company (NYSE:DIS) shares rose 0.13% on Wednesday and another 5.42% after hours.
Related: Goldman Says Bigger Short Squeezes Coming Since Meme Stock Frenzy
The Rise of the Movie Theatre Industry is Here
As âAvatar: The Way of Waterâ gets closer to the $2 billion mark at the worldwide box office, James Cameron says itâs a reminder that moviegoers still value the theatrical experience in an era of streaming dominance.
âIâm thinking of it in the terms of weâre going back to theaters around the world. Theyâre even going back to theaters in China where theyâre having this big COVID surge. Weâre saying as a society, âWe need this! We need to go to theaters.â Enough with the streaming already! Iâm tired of sitting on my ass. Source: Variety.
In recent news, Netflixâs showing of Glass Onion in movie theaters cost the streaming service $200 million for taking it out too early.
In October, AMC announced its first ever Netflix showing in 200 theatres.
Glass Onion: A Knives Out Mystery starring Daniel Craig was released in the U.S. as well as the UK, Ireland, Italy, Germany, and Spain.
The film earned $15 million at the box office but CNBC says the showing could have made $200 million if it had been kept in theatres longer.
Sorry, Charles Gasparino.
âThe streaming business, which I believe is the future and has been growing, is not delivering basically the kind of profitability or bottom line results that the linear business delivered for us over a few decades,â Iger said.
In the interim, Disney hopes to cushion that short fall by continuing to rely on traditional forms of distribution, releasing movies on the big screen, where it recently scored blockbuster successes with âAvatar: The Way of Waterâ and âBlack Panther: Wakanda Foreverâ.
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