The Walt Disney Company said Wednesday it will cut about 7,000 jobs as part of a “major shift” announced by CEO Bob Iger.
The job cuts amount to about 3% of the global media and entertainment workforce and were announced after Disney reported quarterly results that beat Wall Street expectations. The layoffs are part of a broader effort by Disney to cut costs by $5.5 billion.
Eager who is back As CEO in November after a difficult two-year term by his hand-picked successor, Bob Chepek, is under pressure To revive the company’s financial fortunes and share price, which fell 24% last year. Disney is grappling with the costs of attracting new subscribers to its streaming service, Disney+, amid heated competition from Netflix, HBO and others.
“In our enthusiasm to go after subscribers, we’ve become aggressive in our promotions,” Iger said on a conference call to discuss the company’s first-quarter results, which were released Wednesday.
Iger said the company wants to “learn more on our core franchises and our brands” while also reducing costs “on everything we make.”
Disney shares jumped 5.6% in after-hours trading.
As of October 1, Disney had 220,000 employees, with about 166,000 working in the United States and 54,000 internationally.
In its latest results, strong growth in its Disney theme parks helped offset lackluster performance in its movie and video streaming business.
Disney reported Wednesday that it earned $1.28 million in earnings, or 70 cents per share, in the three months through Dec. 31. That compares with net income of $1.1 billion, or 60 cents a share, a year ago. Excluding one-time items, Disney earned 99 cents per share. Analysts expected, on average, adjusted earnings of 78 cents per share, according to FactSet.
Revenue grew 8% to $23.51 billion from $21.82 billion a year earlier. Analysts had expected revenue of $23.44 billion.
The company said Disney+ ended the quarter with 161.8 million subscribers, down 1% from Oct. 1. Hulu and ESPN+ both reported increases of 2% in paid subscribers during the quarter.
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