Walt Disney Co. laid off nearly 300 workers this week, the latest wave in an industry-wide consolidation that continues to reverberate throughout Southern California.
Several people close to the Burbank entertainment giant confirmed this week’s cuts, which came as Disney separately offered early retirement packages for older workers. The voluntary separation program is underway, and the number of executives who will exit later this year has not been determined, one of the knowledgeable sources said Friday.
The layoffs this week largely affected the human resources and the technology divisions — a belt-tightening that comes as Disney Chief Executive Josh D’Amaro seeks to put his imprint on the sprawling company and sharpen its focus.
D’Amaro took the reins from former CEO Bob Iger in March, and the former parks chief has begun to organize the company around a “One Disney” approach to break down corporate silos that sprouted with each large acquisition, including Disney’s 2019 takeover of much of 21st Century Fox.
Disney also has been working for the past year to make Disney+ the company’s central streaming hub. As part of that effort, executives have begun to diminish the Hulu service and brand, which sprung to life nearly 20 years ago.
Disney employees are bracing for further cuts. Many expect a significant television division restructuring early next year, which could result in hundreds of layoffs, according to the Wall Street Journal.
Disney’s legal government affairs department also will be downsized, according to a recent internal memo Disney Chief Legal Officer Horacio Gutierrez.
A Disney spokesperson declined to comment.
Disney President Dana Walden, during a Thursday appearance at Bloomberg News’ Screentime media conference in Hollywood, acknowledged the industry turmoil.
Traditional studios and TV networks have shed tens of thousands workers in recent years after the streaming bubble burst and twin labor strikes paused projects.
Production workers in Los Angeles have felt a double-whammy as other states and countries have offered generous tax subsidies that have pulled productions from L.A.
Separately, Warner Bros. Discovery workers are anxious that David Ellison’s planned takeover of their company next week will ultimately result in hundreds of layoffs as the tech scion and his team hunt for $6 billion in cost cuts that they promised investors and prospective debt holders.
The merger will leave the combined company, which will go by the name Skydance, with more than $80 billion in debt.
Walden suggested her company’s cuts would be more modest. She said restructurings were necessary as companies adapt to changing consumption patterns, which have eroded the more lucrative TV economics of yesteryear.
“There is a need to constantly evaluate how you’re structured,” Walden said. “It is extremely painful. We’ve exited colleagues who I’ve worked with for most of my career and it is, in many ways, a harsh reality.”
She described Disney’s voluntary retirement program as a “generous” program to give “long-tenured executives agency and the opportunity to make their own decisions around whether the timing was right to leave.”
“This evolution, it will never stop,” Walden added. “Technology set their sights on our business, and we must survive, and thrive and grow. And that’s what we’re going to do.”
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