Entertainment giant Disney said Wednesday it was laying off 7,000 employees, in CEO Bob Iger’s first major decision since he was asked back to lead the company late last year.
The layoffs follow similar moves by the US tech giants that have laid off thousands of workers as the economy sours and companies dial back a hiring spurt that began during the height of the pandemic.
“I do not make this decision lightly. I have enormous respect and appreciation for the talent and dedication of our employees worldwide,” Iger said on a call to analysts after Disney posted its latest quarterly earnings.
According to its 2021 annual report, the group employed 190,000 people worldwide as of October 2 of that year, 80 percent of whom were full-time.
The storied company founded by Walt Disney also said its streaming service saw its first ever fall in subscribers last quarter as consumers cut back on spending.
Subscribers to Disney+, the streaming archrival to Netflix, fell one percent to 168.1 million customers on December 31, compared to three months earlier.
Analysts had broadly expected the decline, and the Disney share price remained was eight percent higher in post-session trading.
Investors were reassured by Disney’s lower-than-expected operating losses for its streaming platforms at $1 billion for the October to December period.
Across its vast entertainment empire, the Disney Group saw revenues of $23.5 billion for the three month period, better than analysts had hoped.
Iger, who stepped down as CEO in 2020 after nearly two decades helming the storied company, was brought back after the board of directors ousted his replacement Bob Chapek. It was disappointed in his ability to rein in costs.
Chapek was also singled out for centralizing power around a small group of executives who made important decisions on content despite having little Hollywood experience.
Iger’s new stint as CEO is facing major headwinds, including a campaign by activist investor Nelson Petz who is demanding major cost-cutting after he said Disney overpaid to buy the 20th Century Fox movie studio.
Disney is also caught in a spat with Florida governor Ron DeSantis who is looking to wrest back control of the area around Walt Disney World that has until now been controlled by the entertainment giant.
The politically conservative DeSantis, who is tipped as a possible US presidential candidate, is furious at Disney for criticizing a state law banning school lessons on sexual orientation.
Disney+’s struggles come as its archrival Netflix has emerged from its own rough patch and announced a solid boost in new subscribers for the end of last year.
In its own effort to rein back costs, Netflix has begun a campaign to stop password sharing among its hundreds of millions of global subscribers.
On Wednesday, Netflix revealed it had begun to crack down on password sharing in Canada, New Zealand, Portugal, and Spain as it continues to roll out its new policy worldwide.