Wednesday, June 12, 2024

Disney to Ax 7,000 Staff in Cost-Cutting Effort after Streaming Platform Tanks

'How's that ESG score working out for 'ya, Disney?'

(Molly Bruns, Headline USA) In a recent earnings report, the Walt Disney Company revealed that its streaming platform, Disney+, lost 2.4 million subscribers, resulting in the need for a massive reorganization within the company.

With the recent monthly upcharge for for the monthly streaming service—which went from $7.99 to $10.99—projections showed Disney+ would lose more than 3 million subscribers.

According to the Daily Caller, the total loss of subscribers is not as extreme as originally anticipated. Nonetheless, the embattled company announced that it will be restructuring as a cost-cutting measure, shifting its focus elsewhere as on-demand streaming content faces an uncertain future.

Recently reinstated Disney CEO Bob Iger is also seeking $5.5 billion in budget cuts, with at least $2.5 million coming from “non-content” operations, which will result in around 7,000 employees being laid off—about 3% of the company’s entire workforce.

“We believe the work we are doing to reshape our company around creativity, while reducing expenses, will lead to sustained growth and profitability for our streaming business, better position us to weather future disruption and global economic challenges, and deliver value for our shareholders,” Iger said in a statement.

“This reorganization will result in a more cost-effective, coordinated and streamlined approach to our operations… I do not make this decision lightly,” Iger said.

Disney’s move also comes amid an uncertain economic outlook for the country at large. While the Biden administration has steadfastly denied evidence that the U.S. has been in a recession, relying on suspiciously adjusted jobs data to paint an overly rosy outlook, some of the biggest—and wokest—corporations seem to be making major cuts in preparation for the worst.

Tech companies including Google—which cut 12,000 jobs in January—have even fueled suspicion that they may be trying intentionally to engineer a recession now so that they can send the economy roaring back ahead of the 2024 election, when the incumbent Democrat administration is likely to face formidable challenges in its re-election effort.

Among those potentially vying for the White House is Florida Gov. Ron DeSantis, who has positioned himself as Disney’s top nemesis after the company tried, unsuccessfully, to virtue-signal its support for child grooming in response to Florida’s anti-grooming law.

The backlash not only threatens to revoke Disney’s autonomous control of its flagship Orlando-based Disney World theme park, but also resulted in widespread boycotts of the company’s content after top Disney executives were caught admitting that they secretly inserted sexually inappropriate LGBT messages into films and television series.

Disney’s direct-to-consumer operations saw a loss of $1.05 billion over the quarter, with a total revenue of $8.7 billion.

The entertainment giant did see growth in revenue inside their parks, with guests spending more this quarter than the previous, despite exhorbitant price-hikes and reports of everything from violent fights to sex-trafficking.

Disney is not the only entertainment company facing financial shortfalls and layoffs. Warner Bros Discovery is facing a similar situation. Stocks for Disney, Warner Bros., Paramount and Netflix have all been plummeting.

This news was welcomed by right-wing Twitter, who all told Disney “go woke; go broke.”

“Disney Netflix, Amazon are all paying the price of ‘go woke get broke,” user Martin Stephenson said. “It’s the hill they’re all happy to die on, fortunately their shareholders, investors don’t agree.”

“How’s that ESG score working out for ‘ya, Disney?” another user asked, adding the “#Scumbags” tag to the end of her tweet.

Headline USA’s Ben Sellers contributed to this report.

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