Earnings Results: Disney stock soars as Iger plans 7,000 job cuts in return to earnings stage

by | Feb 8, 2023 | Stock Market

Walt Disney Co. Chief Executive Bob Iger returned to the earnings stage Wednesday and delivered a big beat, largely thanks to improving financial results at Disney’s theme parks, but Disney+ subscribers declined more than expected. Then he dropped a reorganizational bomb: 7,000 layoffs; the creation of three core business segments —  Disney Entertainment, ESPN and Disney Parks, Experiences, and Products — and cost savings of $5.5 billion that will not touch content. The major reorg news sent Disney shares up 9% in after-hours trading.

“This reorganization will result in a more cost-effective, coordinated, and streamlined approach to our operations, and we are committed to running our businesses more efficiently, especially in a challenging economic environment,” Iger said in a conference call with analysts late Wednesday. “While this is necessary to address the challenges we’re facing today, I do not make this decision lightly.” “First, reductions to our non-content costs will total roughly $2.5 billion, not adjusted for inflation; $1 billion in savings is already underway,” he added, in targeting a return to profitability by the end of 2024. Additionally, Iger said Disney has asked the company’s board to reinstate the dividend by the end of the calendar year. The payouts were stopped abruptly during Covid to conserve cash. “Disne …

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