Shortly after morning coffee, the email arrived in Burbank’s inboxes. The cuts had already started by the time the majority of workers had read it twice. With the exception of theme parks and cruise lines, which have been left alone for the time being, about 1,000 jobs at The Walt Disney Co. have been lost or are being let go.
Just two months into taking over as CEO from Bob Iger, Josh D’Amaro wrote the kind of note these situations always seem to call for. challenging but essential. an industry that moves quickly. the requirement for a workforce that is “technologically-enabled” and more flexible. Because the authors of these memos are aware of how their words will be screenshotted and distributed, the language used was meticulous, almost practiced. Beneath the formal language, however, there was a distinct impression that the new boss was not waiting to establish himself.
The breadth of it is remarkable. ESPN. the TV and movie studios. Technology and products. advertising. corporate operations. This is not a surgical procedure. Even though the official line is that it affects less than 1% of Disney’s approximately 230,000 employees worldwide, it’s a sweep. Technically, that math is accurate, but it doesn’t really matter. 1,000 is a big number in the buildings off West Alameda Avenue, where the walls are still adorned with characters that most of us grew up with.
It now seems almost inevitable that the traditional television industry will suffer another setback. For years, the old economic engine—those lucrative programming fees from ESPN, Disney Channel, and the rest of the cable bundle—has been steadily depleting. The audience shifted to streaming. In order to justify the monthly bill, streaming requires constant new content, pays less, and churns more. Even though the precise timing was uncertain, anyone who saw Iger return in late 2022 and eliminate about 8,000 jobs could predict this.
Since taking over, D’Amaro has been discussing “one Disney”—the notion that the live sports industry, the studios, the parks, and the streaming services all contribute to the same emotional bond between the audience and the brand. It’s a lovely expression. Another question is whether it survives contact with the actual organization. Disney’s reporting structure has always been notoriously convoluted, and earlier this year’s marketing consolidation under Asad Ayaz was a preview of what consolidation typically looks like in practice: fewer employees, flatter charts, and numerous meetings regarding ownership.
The fact that the company is not alone in this situation both lessens the impact and heightens the unease. Last week, Sony Pictures revealed hundreds of cuts. Since taking over, David Ellison’s Paramount Skydance has eliminated over 2,000 positions. Netflix and Amazon have also been making cuts. Hollywood as a whole seems to believe that the post-pandemic correction never truly ended, that the industry quietly acknowledged it was smaller than it claimed to be and is now gradually coming clean about it.
A portion of the story is revealed by the box office. Since March, Pixar’s “Hoppers” has made over $350 million worldwide, which is a true success. Disney is heavily relying on “The Devil Wears Prada 2,” a follow-up to a nearly two-decade-old movie, next month, which says something about how studios and audiences interact these days. People say they want fresh narratives. They continue to purchase tickets for well-known ones. Disney has noticed—possibly too well.
It’s difficult to ignore the gravity of the situation. Growth in streaming subscribers has stopped. The integration between Disney+ and Hulu is still being finalized. Due to declining TV ad revenue, marketers are pursuing TikTok virality. D’Amaro, who recently received the corner office, is now approving his first round of suffering. It’s still unclear if this is the beginning of a sharper, leaner Disney or just another phase of a protracted layoff. You get the impression that even Burbank is still unsure as you watch this play out.
