March 27 (UPI) — Disney will start laying off workers this week in what is the first of three rounds to cut 7,000 jobs by the summer, according to a memo sent to staff Monday by chief executive officer Bob Iger.
“This week, we begin notifying employees whose positions are impacted by the company’s workforce reductions,” Iger wrote in the memo obtained by CNN. Leaders will be communicating the news directly to the first group of impacted employees over the next four days.”
While this week’s layoffs are the first round of job cuts, Iger announced there will be more layoffs next month.
“A second, larger round of notifications will happen in April with several thousand more staff reductions, and we expect to commence the final round of notifications before the beginning of summer to reach our 7,000-job target,” Iger said.
The layoffs are part of a major, multi-tiered restructuring plan, announced in February, to cut costs at Disney by $5.5 billion after its valuation plummeted last year. The layoffs will hit all divisions of the company, including Disney parks and resorts, ESPN, as well as media and distribution.
Disney’s streaming business is made up of Disney+, Hulu and ESPN+. Disney+ alone has lost approximately 2.4 million subscribers, while the company’s direct-to-customer services operated at a loss of $1.05 billion in the first quarter of the year.
While Disney shares are up about 8% this year, they fell 44% last year. Disney estimates it should stop losing money by 2024.
Iger, who returned to Disney in November after stepping down as chief executive in February 2020 to become Disney’s executive chairman, has focused on reorganizing the company since his return.
“We have made the difficult decision to reduce our overall workforce by approximately 7,000 jobs as part of a strategic realignment of the company, including important cost-saving measures necessary for creating a more effective, coordinated and streamlined approach to our business,” Iger wrote Monday.
“For our employees who aren’t impacted, I want to acknowledge that there will no doubt be challenges ahead as we continue building the structures and functions that will enable us to be successful moving forward.”