Disney announces that it will reduce the workforce by 7,000 people, Disney + and Hulu's operating deficit exceeds 140 billion yen

The Walt Disney Company (Disney) announced on February 8, 2023 at the financial results briefing for the first quarter of 2023 (October to December) that it reduced costs by 5.5 billion dollars (about 720 billion yen). As part of its efforts to strengthen the earnings of its streaming business, the company announced a drastic restructuring with large-scale layoffs. The layoffs represent about 3.6% of Disney's workforce.

Disney's Q1 FY23 Earnings Results Webcast - The Walt Disney Company
https://thewaltdisneycompany.com/disneys-q1-fy23-earnings-results-webcast/

Disney to cut 7,000 jobs in major revamp by CEO Iger | Reuters
https://www.reuters.com/business/disney-earnings-beat-estimates-visitors-crowd-theme-parks-2023-02-08/

Disney's laying off 7,000 as streaming boom comes to an end - The Verge
https://www.theverge.com/2023/2/8/23590901/disney-layoffs-earnings-streaming-bob-iger

In November 2022, Disney CEO Bob Chapek was replaced by Bob Iger. Mr. Eiger retired as CEO once in 2020, but will serve as CEO of Disney again for two years from November 2022.

Filled with gratitude and excitement to be back @WaltDisneyCo ! pic.twitter.com/HJYs0FAOVR

—Robert Iger (@RobertIger) November 28, 2022

At the time of his appointment in November 2022, Iger said, ``One of our top priorities is to strengthen the revenue of our streaming business. We have to start pursuing sexuality, ”he argued that the cost structure of the entire streaming business needs to be rigorously reviewed.

As part of reviewing the cost structure of the streaming business, in December 2022, Disney will be rolling out a slightly cheaper plan with ads on its own video streaming service, Disney+.

Disney + develops a new plan with advertisements, the version without advertisements raises the price by $ 3 - GIGAZINE

Disney+ has a total of 46.6 million members, according to its Q1 2023 earnings report. Revenue from Disney's direct customer sales division, which includes streaming services, increased 13% to $5.3 billion (about 700 billion yen), but it also posted an operating loss of $1.1 billion (about 144 billion yen).

The direct customer sales division also posted an operating loss of $1.5 billion in the fourth quarter of 2022 (July-September), which Disney interprets as the cost of content rising on Disney+ and Hulu.

In addition, Disney also announced that it will conduct large-scale layoffs targeting 7,000 people, about 3.6% of all employees. The 7,000 job cuts announced this time are also seen to compensate for the deficit in the streaming service business, where costs are increasing, and CEO Eiger said, ``(Large-scale layoffs) deal with the challenges we face today. It is necessary to do so,' he commented.

“Our priority is the sustainable growth and profitability of our streaming business,” said Iger. remains our goal.”

In addition, Disney said that it will maintain annual spending on content at 30 billion dollars (about 3.95 trillion yen), and announced that it plans to produce sequels to ' Ana and the Snow Queen ', ' Toy Story ' and ' Zootopia ' doing.