Disney to lay off 200 employees amid restructuring plans

Popular entertainment company Walt Disney is planning to reduce its workforce by almost 6 per cent. About 200 employees will be laid off in its ABC News Group and Disney Entertainment Networks units.

The development, which was first cited by The Wall Street Journal (WSJ), comes amidst several restructuring efforts in the company. The shift represents a response to the recent declining influence of traditional cable television and the repositioning of consumer behaviour. 

As the entertainment company adapts to a rapidly evolving media industry, the layoffs appear to be part of a broader strategy to reduce expenses and streamline operations.

Though Disney is yet to release an official statement on the layoff, WSJ noted that several key divisions are to be affected by the restructuring including the merging of ABC’s long-running news magazine programs, 20/20 and Nightline. The company is also planning to eliminate the unit operating FiveThirtyEight, the political and data analysis website.

Likewise, the production staff at Good Morning America is expected to be affected. The Disney Entertainment Networks division, which oversees cable channels such as FX, is likewise expected to witness the trend in its programming and scheduling operations unit.

Technext reported in February 2023 that Disney+ laid off 7,000 employees, roughly 4 per cent of its global workforce, as part of its restructuring plans in February 2023.  

Over the past year, Disney’s stock has declined by almost 4 per cent, signalling investors’ concerns over its ability to manoeuvre the industry’s challenges. However, the company’s stock showed little improvement following on Wednesday.  

The layoff follows an industry-wide shift that has seen major media companies rethink their business models.

Similar Read: Vodacom South Africa to layoff 133 employees amid plans to accelerate growth of earnings.

Disney’s financial performance

The entertainment company has not been experiencing a smooth ride lately. Its top streaming platform, Disney+, has witnessed a subscriber decline in recent quarters while competitors such as Netflix continue to expand and raise subscription fees.

Following a substantial price increase during Q4 2023, Disney+ experienced a decline of 1.3 million subscribers. Within the loss, the streaming platform successfully reduced its streaming business losses by $300 million during the October-December period.

On the green side, Disney’s most recent earnings report exceeded WSJ’s projections, as it was partly driven by cost-cutting measures and strong performances in its theme park and experiences segment. Following the flow, the company noted that it anticipates a “modest decline” in Disney+ subscriptions for the second quarter.

Within the ongoing decline in cable television viewership, driven by cord-cutting and the rise of streaming services, the company has been challenged in its traditional broadcast business.

Recent layoffs in the tech world

The Disney layoff is happening following a series of other likened developments in the rapidly evolving media space. 

Recently, Technext reported TikTok’s layoff within its unit that handles various content moderation and deploys community guidelines –  trust and safety unit. The layoffs spread across its teams in Asia and Europe, the Middle East, and Africa.

The video content platform action follows that of October 2024 when the company laid off hundreds of employees from its global workforce which included about 400 staff in Malaysia as it shifted focus towards a greater use of AI in content moderation. Most of the employees involved were in TikTok’s content moderation operations. 

In February, Meta carried out an expected company-wide layoffs of 5 per cent of its workforce (almost 4,000 employees). The job cuts will enable the company to focus on AI and improve efficiency.

Employees in Germany, France, Italy, and the Netherlands were exempted from the cuts “due to local regulations,” while those in more than a dozen other countries across Europe, Asia, and Africa bore the burns. 

Also, Vodacom Group laid off 113 employees in its South African subsidiary. The leading telecoms and digital services provider in Africa attributed the personnel downsizing as part of the group’s restructuring plans.

The company, who described the job cut as unfortunate, said that it is part of the concerted effort to ensure that the company remains fit for purpose to support its strategic shift towards becoming a leading technology company.

The development is the second time in the past 12 months that Vodacom has cut jobs. A year ago, Vodacom cut about 80 roles which it blamed on its shift from being a telecommunications operator to more of a technology company.

Layoffs in the technology sector started as a consequence of overhiring during the COVID-19 pandemic. Companies tried to balance the situation but failed as many firms found they had more employees than needed which led to significant job cuts.

Experts have predicted that job losses may continue to escalate in the coming months as businesses struggle financially, potentially pushing the unemployment rate to 5% by the end of the year.