American entertainment conglomerate Walt Disney’s Chief Executive Bob Chapek announced on Friday about company wide cost-cutting and also told division leaders that layoff are likely to follow, reported Wall Street Journal which accessed an internal memo of the company. As per the report, the company will put a ban on all but essential work travel and freeze hiring for all but few critical positions.
The announcement came days after Disney reported slump quarterly earnings and a $1.5 billion quarterly loss at its streaming business.
The memo, addressed to all executives at the senior vice president level or above, stated that a task force led by finance chief Christine McCarthy and general counsel Horacio Gutierrez, would review marketing, content and administrative spending across the entire company and recommend cuts.
“I’m fully aware this will be a difficult process for many of you and your teams,” Chapek said in the memo. “We are going to have to make tough and uncomfortable decisions.”
In the process of reviewing all of Disney’s costs, the company will “look for every avenue of operations and labour to find savings,” he said and added, “we do anticipate some staff reductions as part of this review.”
The memo did not specify the number of possible layoffs but stated that travel should be limited and would require approval from executives. “I have no doubt we will achieve our goals and create a more nimble company,” Chapek said in the memo.
Companies across the media and technology sector have been announcing layoffs and purse-tightening measures as big bets on streaming and the metaverse made during the coronavirus pandemic show signs of unravelling, the report stated.
Since launching its flagship Disney+ service in late 2019, Disney’s streaming business has gained 235 million subscribers globally across all its video platforms, which include Hulu, ESPN+, the Star service in Europe and Hotstar in Asia. The growth transformed Disney over a short time into a massive player in the streaming world, capable of taking on Netflix Inc. and other rivals in dozens of markets around the world.