Media company Walt Disney Co is laying off several hundred employees across its film and television divisions, highlighting the downturn in the entertainment industry.
The layoffs, which began on Monday, affect staff in marketing, publicity, casting, development, and corporate finance, according to media reports. This round follows the 200 job cuts at Disney’s ABC and entertainment TV networks in March. Overall, the company has cut more than 8,000 jobs in recent years as part of efforts to boost profitability.
Hollywood restructures as cost pressures mount
Hollywood has been in cost-cutting mode for several years, with production and employment steadily declining, reports Bloomberg. Studios have scaled back film releases to improve profitability, especially as theatre attendance remains below pre-pandemic levels. Meanwhile, consumers are cancelling cable subscriptions in favour of streaming services, reducing advertising and distribution revenue for traditional TV channels.
This shift is driving a major industry reorganisation. Comcast reportedly plans to spin off most of its cable channels, including MSNBC, USA, and CNBC, by year-end. Warner Bros. Discovery has restructured internally to separate its studio and cable operations, potentially paving the way for divesting the latter. Paramount Global also anticipates further cuts as it moves forward with a merger with independent studio Skydance Media.
Disney’s strategic decisions and financial outlook
Disney had considered selling its TV networks, including ABC, but chose to retain them, according to reports. In February 2023, it cut 7,000 jobs, aiming to save $5.5 billion, later raising the target to $7.5 billion. Industry rivals have also executed thousands of layoffs.
At the close of its last financial year in September, Disney employed approximately 233,000 people, with 76 per cent working full time. In its latest earnings report released in May, the company surpassed Wall Street forecasts, driven by an unexpected surge in Disney+ streaming subscriptions and robust performance from its theme parks. Business Standard