Retrenchment process begins in Disney: will remove 7000 employees from the global workforce

America's leading mass media and entertainment company Walt Disney Co. Has started the process of retrenchment. On February 8, the company announced the layoff of 7,000 employees or 3.6% of its total global workforce. According to reports, Disney has taken this decision to lay off as part of an effort to cut costs and make its streaming business profitable.
Disney's Chief Executive Officer (CEO) Bob Iger shared a memo to employees on Monday. He has said that the first group of employees will be notified about the retrenchment in the next four days. There will be a massive layoff in the second round, which will happen in April. Due to this several thousand employees will be affected. Employees affected by the layoff will receive notice before summer.
As of October 1, Disney has 2.20 lakh employees in its total global workforce, of which 1.66 lakh are in the US. According to reports, Disney wants to save $ 5.5 billion, i.e. about 45 thousand crore rupees in its cost by the retrenchment of employees. The company took this major decision just after the announcement of Disney's quarterly results.
In the first quarter ending December 31, 2022, Disney + Hotstar lost 3.8 million paid subscribers. The company has suffered a loss of $ 1 billion (8.25 thousand crore rupees) due to the decrease in subscribers. In this quarter, Hotstar has been able to add only 2 lakh new subscribers from the US and Canada. Currently, Hotstar has a total of 46.6 million i.e. 46 million subscribers.
This restructuring in the company is taking place under the leadership of Disney's new CEO Bob Iger. Disney now wants to focus more on its core brands and franchises. Disney's restructuring is being done in the face of slowing subscription growth and increasing competition for streaming viewers. Not only this, Disney's decision came in response to criticism from activist investor Nelson Peltz. Nelson had said that the company was spending too much on streaming.
Under this new plan, Disney is restructuring into three segments. The restructuring includes Disney Entertainment, the sports-focused ESPN unit, Disney Parks, Experiences and Products unit. TV executive Dana Walden and film chief Alan Bergman will lead the entertainment division, while Jimmy Pitaro will continue to lead ESPN. Tv executive Dana Walden and film chief Alan Bergman will lead the entertainment division, while Jimmy Pitaro will continue to lead ESPN.
Bob Iger has taken over the reins of the company's CEO in November 2022. Earlier, Bob Iger was made CEO for the first time in 2005. Iger served as the company's CEO for 15 years before stepping down from his position in 2020. According to a Reuters report, Disney is restructuring for the third time in 5 years. Earlier in 2020, the company had fired 32 thousand of employees.