The Walt Disney Company will this week begin sending layoff notices for more than 7,000 employees. The positions are set to be eliminated as part of a cost-cutting effort that will take place across all of the company’s key divisions.
In a memo sent to employees Monday morning, Disney CEO Bob Iger noted the plan to cut Disney’s overhead with massive staff reductions on Feb. 8. These cuts are expected to include high senior management levels along with lower-level executives.
“The difficult reality of many colleagues and friends leaving Disney is not something we take lightly,” noted Iger in the memo. “This company is home to the most talented and dedicated employees in the world, and so many of you bring a lifelong passion for Disney to your work here.”
The initial round of layoffs for this week precedes the annual shareholder meeting of the company, scheduled for April 3. In February, Iger had initially revealed the downsizing plan, stating that it is crucial for attaining cost savings of $5.5 billion.
Disney has been facing financial difficulties, which have been worsened by several decisions made by Iger. These include the acquisition of Fox’s entertainment assets for $71 billion, which resulted in a significant debt burden for the company. Additionally, the costly move to compete with Netflix in the streaming market and the commitment to restoring Disney’s dividend by the end of the year have also reduced the amount of money available for cast member salaries and creative works.
While the 7,000 layoffs represent a small proportion of Disney’s workforce, which stood at 223,000 employees in October, the number is still considered to be alarming by many people.
Read Iger’s full memo below:
Dear Fellow Employees,
As I shared with you in February, we have made the difficult decision to reduce our overall workforce by approximately 7,000 jobs as part of a strategic realignment of the company, including important cost-saving measures necessary for creating a more effective, coordinated and streamlined approach to our business. Over the past few months, senior leaders have been working closely with HR to assess their operational needs, and I want to give you an update on those efforts.
This week, we begin notifying employees whose positions are impacted by the company’s workforce reductions. Leaders will be communicating the news directly to the first group of impacted employees over the next four days. A second, larger round of notifications will happen in April with several thousand more staff reductions, and we expect to commence the final round of notifications before the beginning of the summer to reach our 7,000-job target.
The difficult reality of many colleagues and friends leaving Disney is not something we take lightly. This company is home to the most talented and dedicated employees in the world, and so many of you bring a lifelong passion for Disney to your work here. That’s part of what makes working at Disney so special. It also makes it all the more difficult to say goodbye to wonderful people we care about. I want to offer my sincere thanks and appreciation to every departing employee for your numerous contributions and your devotion to this beloved company.
For our employees who aren’t impacted, I want to acknowledge that there will no doubt be challenges ahead as we continue building the structures and functions that will enable us to be successful moving forward. I ask for your continued understanding and collaboration during this time.
In tough moments, we must always do what is required to ensure Disney can continue delivering exceptional entertainment to audiences and guests around the world – now, and long into the future. Please know that our HR partners and leaders are committed to creating a supportive and smooth process every step of the way.
I want to thank each of you again for all your many achievements here at The Walt Disney Company.
Umberto Gonzalez contributed to this report.