Disney to lay off 7,000 workers

The entertainment giant's CEO announced that it will reduce its worldwide workforce by almost 4%. With that, it expects to cut costs by $5.5 million.

Disney is joining the crisis that many big companies are facing. Bob Iger announced on Wednesday that he will lay off 7,000 of the company's workers. The redundancies will take place across the board, and will entail a 3.6% reduction in the entertainment giant's worldwide workforce.

The number of layoffs is one of the largest workforce reductions the company has ever had to face, second only to 2019. However, the Walt Disney Corporation CEO said in statements reported by the LA Times, that he regrets having to lay off each and every one of these workers:

While this is necessary to address the challenges we’re facing today, I do not make this decision lightly. I have enormous respect and appreciation for the talent and dedication of our employees worldwide, and I’m mindful of the personal impact of these changes.

Disney + lost 2.4 million suscribers

The measure, reports The Guardian, is part of a $5.5 million cost-cutting plan. Funding that, according to Iger, was lost due to the poor results obtained by its streaming platform, Disney +:

The streaming business, which I believe is the future and has been growing, is not delivering the kind of profitability or bottom-line results that the linear business delivered for us over all over a few decades. And so we’re in a very interesting transition period, but one, I think, is inevitably heading towards streaming.

In fact, Iger acknowledged that part of Disney+'s problem may be due in large part to the low platform advertising returns, and not, as many believed, for having raised subscription prices: "In our zeal to go after subscribers, I think we might have gotten a bit too aggressive in terms of our promotion," he said after revealing that 2.4 million people unsubscribed during the last quarter.

On the same call with investors, Iger delivered some good news and assured that both the fifth Toy Story and third Frozen installments were in the works. He did not give much more information about these new projects, but everything points to the fact that they could be part of the strategy to recover lost profits by rescuing two of the sagas that have given the company the most profits.