The Walt Disney Co. plans to freeze hiring and cut some jobs ahead of winter vacation after a disappointing quarter, a report said.
In the note sent to employees, Bob Chapek, CEO of Disney said the company would move forward by prioritizing cost-cutting measures, including “some staff reductions.”
“I am fully aware that this will be a difficult process for many of you and your teams,” Chapek wrote. “We’re going to have to make some tough and uncomfortable decisions. But that’s exactly what leadership demands, and thank you in advance for stepping in during this important time.”
“During this evaluation process, we will review all operations and labor opportunities to find cost savings, and we anticipate staff reductions as part of this review,” Chapek said in the statement. note sent on Friday.
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The chief executive also said the company will limit the number of additional employees it hires and is only focusing on acquiring new employees in the “most critical and important positions for the business”. .
“We limit the addition of staff thanks to a targeting hiring freeze. Hiring for the small subset of the most critical and business-focused positions will continue, but all other roles are on hold. Your segment managers and HR teams have more specific details on how this will apply to your teams.”
Disney has around 190,000 employees, a number that has been declining every year since 2018.
The memo is the latest business indicator of how Disney plans to follow up on a disappointing quarter that appeared to demoralize investors. Shares of the company fell to a 52-week low on Wednesday, falling from $101 on Monday to just under $87. They have since rebounded to around $95 on Friday night.
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Chapek also said in the memo that Disney will establish “a cost structure task force” to further reduce company expenses. It will be led by CEO, Chief Financial Officer Christine McCarthy and General Counsel Horacio Gutierrez.
The memo comes just days after McCarthy first announced Disney’s plans to make short-term and long-term changes to save money.
“We are actively evaluating our cost base right now and looking for significant efficiencies,” she said. “Some of them will provide short-term cost savings, and others will generate longer-term structural benefits.”
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Disney suffered considerable losses as unwavering inflation continues to squeeze consumer wallets. And, as the Disney+ streaming service continues to win subscriptions — the company boasted a gain of 12.1 million subscribers this quarter — operating losses continue to pile up. Disney posted losses of about $1.5 billion in its fiscal fourth quarter.
The company has also been embroiled in controversy, including its outspoken opposition to Florida Governor Ron DeSantis signing a bill that prevents the teaching of sexual orientation in classrooms and claims to be too “woke” for some consumers.