Disney to lay off 7,000 workers to slash $5.5 billion expenses
Business
Restructure will result cost-effective, unified approach; we’re dedicated to operating effectively, says CEO
LOS ANGELES (Reuters) - 7,000 positions will be lost as part of a massive restructuring announced by Walt Disney Co on Wednesday led by freshly reinstated CEO Bob Iger in an effort to slash $5.5 billion in expenses and turn its streaming business profitable.
An estimated 3.6 percent of Disney's global staff will be let off. After-hours trading saw a 4.7 percent increase in Disney shares to $117.22.
The actions addressed some of the concerns from activist investor Nelson Peltz that the Mouse House was overpaying on streaming including a pledge to reintroduce a dividend for shareholders.
Iger said on Wednesday that Disney might have been too eager to win over internet video subscribers when traditional TV was on the wane.
The corporation will be divided into three sectors as part of a strategy to reduce expenses and give creative leaders more control. The sectors include an entertainment unit that includes film, television and streaming; an ESPN entity focused on sports and Disney parks, experiences and goods.
On a conference call with analysts Iger said, "This restructure will result in a more cost-effective, unified approach to our operations," adding, "We are dedicated to operating effectively particularly in a difficult situation."
Iger stated that Disney's top goal is still streaming.
