by Disney (DIS) will lay off 7,000 workers as the company seeks to cut costs by $5.5 billion. As a result, the media giant plans to restructure the organization into three core business segments: Disney Entertainment, ESPN and Disney Parks, Experiences and Products.
“We will reduce our workforce by approximately 7,000 jobs,” CEO Bob Iger said on the company’s first-quarter earnings call. “While this is necessary to address the challenges we are facing today, I do not make this decision lightly. I have enormous respect and appreciation for the talent and dedication of our employees around the world and am aware of the personal impact of these i changes.”
Disney shares jumped as much as 8% following Iger’s comments on staff cuts and cost cuts. Shares have modestly trimmed gains in after-hours trading since then, up about 5%.
Disney reported quarterly results after the bell Wednesday that showed a thumping high and low as demand for the company’s theme parks soared during the holiday period.
As expected, Disney+ subscribers showed a slight decline in the first quarter due to the absence of the Indian Premier League cricket tournament on its Indian brand, Disney+ Hotstar.
Streaming losses narrowed to $1.1 billion in the first quarter versus a $1.5 billion loss in the fourth quarter, ahead of the company’s previous guidance as Disney’s ad-supported level and recent price hikes helped reduce losses.
Wednesday’s report was the first since CEO Bob Iger’s return to the company in November
In his prepared remarks, Iger said the new strategic organization “will result in a more cost-effective coordinated and streamlined approach to our operations, and we are committed to running our businesses more efficiently, especially in a challenging economic environment.”
Alan Bergman and Dana Walden will serve as co-chairmen of Disney Entertainment, which will include the company’s entire portfolio of global entertainment media and content businesses, including streaming.
Jimmy Pitaro will continue to serve as president of ESPN, which will include ESPN Networks, ESPN+ and its international sports channels, while Josh D’Amaro will continue as president of Disney Parks, Experiences and Products.
Iger emphasized his commitment to making a direct link between content decisions and financial performance. He said Disney+ is on track to achieve profitability by the end of fiscal 2024.
Elsewhere on the call, Iger revealed that he has asked the board to reinstate the company’s dividend by the end of the calendar year, something activist investor Nelson Peltz has explicitly pushed for in his proxy battle.
The dividend, which was halted during the pandemic in an effort to save money, will be “modest” initially but will steadily increase over time, the executive said, adding, “Our cost-cutting initiatives will make that possible.”
Peltz’s Trian Fund Management said it owns about 9.4 million shares of Disney, which works out to about $900 million. The hedge fund, which froze at Iger’s surprise return, is pushing for more cost cuts, operational adjustments and a post-Iger successor, something the firm also wants.
“On the issue of succession, the board recently established a dedicated succession planning committee headed by Mark Parker, who will become chairman of the Walt Disney Company Board of Directors following its annual meeting in early April,” Iger said during a press conference. the call.
The executive has not directly addressed the current proxy fight with Peltz. The company will host its annual meeting of shareholders on Monday, April 3 at 10:00 am PT.
Alexandra is a Senior Entertainment and Media Reporter at Yahoo Finance. Follow her on Twitter @alliecanal8193 and email her at [email protected]
For the latest earnings reports and analysis, earnings whispers and expectations, and corporate earnings news, click here
Read the latest financial and business news from Yahoo Finance
Download the Yahoo Finance app for Apple OR Android
Follow Yahoo Finance on Chirping, Facebook, Instagram, Flipchart, LinkedInAND Youtube
