Disney to cut 7,000 jobs in major revamp

• Walt Disney Co will slash 7,000 jobs as part of a $5.5 billion cost-saving push.
• The layoffs are projected to constitute 3.6% of Disney’s global workforce.
• The firm will restructure into three sectors.

Walt Disney Co (DIS.N) unveiled a massive restructuring on Wednesday under newly reinstated CEO Bob Iger, slashing 7,000 jobs as part of a $5.5 billion cost-saving push to make its streaming division profitable.

The layoffs are projected to constitute 3.6% of Disney’s global workforce. In after-hours trading, Disney shares surged 4.7% to $117.22.

The moves, which included a vow to reintroduce a dividend for shareholders, addressed part of activist investor Nelson Peltz’s concerns that the Mouse House was overpaying on streaming.

“We are pleased that Disney is listening,” a spokesperson for Peltz’s Trian Group said in a statement late Wednesday.

The firm will restructure into three sectors in order to decrease expenses and return control to creative executives: an entertainment unit that includes film, television, and streaming; a sports-focused ESPN entity; and Disney parks, experiences, and merchandise.

“This reorganization will result in a more cost-effective, coordinated approach to our operations,” Iger told analysts on a conference call. “We are committed to running efficiently, especially in a challenging environment.”

Iger said streaming remained Disney’s top priority.

He said the company would “focus even more on our core brands and franchises” and “aggressively curate our general entertainment content.”

Iger also said he would ask the company’s board to restore the shareholder dividend by year-end. Chief Financial Officer Christine McCarthy said the initial dividend would likely be a “small fraction” of the pre-COVID level with a plan to increase it over time.

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