Disney mass layoffs loom as Bob Iger jumps into cost-saving mode.

Tech companies aren’t the only ones seeing mass layoffs. America’s premier entertainment giant, the Walt Disney Company, has announced it will lay off 7,000 of its workers in an effort to cut $5.5 billion in costs. Disney CEO Bob Iger, who only returned to the helm last November, made the announcement after Disney reported its final-quarter 2022 financial results yesterday.

As of October 2022, Disney had around 220,000 employees worldwide. The layoffs mean Disney is getting rid of roughly 3.6% of its workforce. It is unknown if the job losses will affect certain departments in Disney more than others or if they’ll be spread evenly across the globe. CNBC says 166,000 of Disney’s worldwide workforce are located in the United States.

In addition to the cuts, Disney said it will also restructure its organization into three divisions. Parks, Experiences and Products will oversee theme parks, cruises, and other experience-based offerings. ESPN will oversee all things related to the sports network. Finally, Disney Entertainment will oversee its movie, television, and streaming offerings.

Announcing the cuts and restructuring on an earnings call with analysts yesterday, Iger said (per Quartz), “This reorganization will result in a more cost-effective, coordinated approach to our operations. We are committed to running efficiently, especially in a challenging environment.”

In the company’s most recent quarter, Disney had earnings per share of 99 cents and revenue of $23.51 billion—both metrics beating expectations. But for the first time since launching the Disney Plus streaming service at the end of 2019, the service lost subscribers—2.4 million of them.

Still, it’s not likely that Disney’s cost-cutting will hit the streaming service harder than other divisions. Disney Plus has always been Bob Iger’s baby and he’s been vocal about it being the future of the company.

Instead, analysts MoffettNathanson believe Disney’s traditional television assets are ripe for pruning. They point out that last September Iger stated that traditional TV “is marching to a distinct precipice, and it’s going to be pushed off.” Iger’s comments mirror those of other leaders in the entertainment field, who believe that traditional TV, or “legacy television” as it is now known, is quickly coming to an end.

As for Disney, at the time of this writing, the company’s stock (ticker: DIS) is up over 6% in pre-market trading after the news of the layoffs.