Disney will lay off 7,000 employees after a huge decline in its subscriber base

The business is starting a substantial company-wide cost-cutting initiative that will target costs related to marketing, labour, technology, procurement, and other expenses, which will make up around 50% of the plan’s budget.

As a result of Disney+’s paid subscriber loss of 1% in the third quarter of October to December to 161.8 million, The Walt Disney Co. will reduce its personnel by 7,000.

In India and other Asian nations including Malaysia, Thailand, and Indonesia, the service is referred to as Disney+ Hotstar. The number of subscribers fell by 6% to 57.5 million from 61.3 million.


Due to a negative foreign exchange impact, the average monthly income per paid member for worldwide Disney+ (excluding Disney+ Hotstar) declined from $5.83 to $5.62, the firm said in a statement. Due to improved per-subscriber advertising revenue, Disney+ Hotstar’s average monthly revenue per paying subscriber rose from $0.58 to $0.74.

Disney is considering a strategic reorganisation, according to Bob Iger, who was unexpectedly reappointed as the company’s CEO in November. Under this plan, there will be three core business segments: Disney Entertainment, ESPN, and Disney Parks, Experiences, and Products.

“These organisational changes will be put into place right away, and by the end of the fiscal year, we will start reporting under the new organisational structure. A more integrated, cost-efficient, and streamlined approach to our operations will be produced by this reorganisation. During an earnings call, Iger stated, “We are seeking $5.5 billion in cost cuts across the company. Reductions in non-content expenditures will amount to about $2.5 billion, not accounting for inflation. In general, the savings will come from lower SG&A (selling, general, and administrative expenses) and other operating costs across the company. Savings of $1 billion are already under way. We will cut about 7,000 jobs from our staff in order to help achieve this.

We anticipate saving about $3 billion on the content side over the next few years, excluding sports, Iger continued. According to Iger, Disney’s focus is the continued expansion and profitability of its streaming business, and according to the latest projections, Disney+ will become profitable by the end of the current fiscal year (2024). “Our primary brands and franchises, which have consistently generated superior returns, will be the centre of even more of our attention. We’ll actively select our general entertainment content, evaluate every area we’ve entered, and decide how much local and how much global content is appropriate. As part of our pricing strategy adjustments, we will thoroughly review our marketing plans and make final adjustments to our advertising campaigns across all streaming platforms. While balancing platform and programme marketing better, we will enhance our marketing.

By better balancing platform and programme marketing and utilising our existing distribution networks for marketing and programming, we will enhance our marketing efforts “added he.

According to Christine McCarthy, senior executive vice president and chief financial officer, the business is starting a significant company-wide cost reduction plan. This plan will focus on cutting costs in the following areas: marketing, labour, and technology. “The forecast we provided last quarter includes about $1 billion of this aim. We continue to anticipate that operating income for the fiscal 2023 segment will increase in the high single-digit percentage range. With an annually savings objective of roughly $3 billion for future spending outside of sports, we also anticipate realising more economies in our content spending over the long run “McCarthy said.

Iger is expected to restore growth for the entertainment giant’s India business under Disney Star by lowering costs, including a reevaluation of its substantial investments in acquiring sports rights. Iger’s comeback came less than a year after his departure, and his replacement Bob Chapek had been criticised for Walt Disney’s lacklustre performance.

As far as India is concerned, Iger is probably going to take a closer look at expenses, which will lead to fewer or more carefully budgeted streaming shows and less crazily competitive bidding for sports rights. Given the US economic climate, the next two years will be very challenging. Although his first priority will be the US and he would only consider India in the second year, this might also indicate rearrangement from a leadership standpoint, a media expert had previously stated in an interview with Mint while declining to be identified.

The ad-supported business model is currently successful for Disney+ Hotstar in India, but the source predicted that it will spread to other countries now that subscription fees are no longer viewed as viable.

Data uncovered by business intelligence platform Tofler shows that Star India, owned by the Walt Disney Company, reported a 74% increase in its consolidated net profit for the fiscal year that concluded on March 31, 2022. From Rs. 815.72 crore in the same period last year, the company’s earnings increased to Rs. 1421.27 crore this quarter.