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Breaking News: Disney Announces Third Round of Layoffs Cutting Over 2000 Jobs

Breaking News: Disney Announces Third Round of Layoffs Cutting Over 2000 Jobs

  Breaking news is a term often used in broadcast journalism to refer to stories with developing or significant impacts, often distinguished from old breaking stories which have already been reported upon. The Walt Disney Company announced in February that there would be nearly 7,000 job cuts and position eliminations across its various business units; no frontline positions at its parks are anticipated to be affected in this round of cutbacks and positions shedding. Entertainment As Disney continues its cost-cutting plans, employees in its Entertainment sector are taking the brunt. Disney announced in February its cost-cutting plans when new CEO Bob Iger took the reins following former CEO Bob Chapek's removal. At that earnings call, Iger stated his intent to eliminate 7,000 jobs--roughly 3% of its global workforce--through layoffs; this week began the first wave of layoffs, and managers will shortly notify any affected employees. Another round is set for April, and another in summer; finally reaching its goal of eliminating 7,000. First round layoffs affected corporate staff as well as Disney Entertainment, ESPN and Parks Experiences and Products divisions; however, front line cast members at its parks or resorts were unaffected; those cuts have since been completed. Second round of cuts began on Monday; with a third wave scheduled to finish before June's end. Variety reports that Disney's latest round of layoffs may target some in their television and movie studios; this could lead to the closure of less profitable assets like FX network and Freeform TV, among others. Other areas likely affected could include corporate/international affairs as well as digital offerings like ad-supported ESPN+ streaming services. Media companies are facing increasing competition online and struggling to make their offerings profitable, leading them to reduce spending on content while simultaneously cutting costs and offering cheaper subscription options to attract new subscribers. Some even opted for cheaper ad-supported packages in hopes of drawing them away from competing services. Disney recently unveiled their workforce reduction plan and reorganization that gave creative leaders more decision-making power, in an attempt to become more flexible and adaptable in an ever-evolving industry. Disney CEO Bob Iger lauded these changes for contributing to long-term success of his organization and thanked its leadership teams for their hard work and dedication toward it. Parks & Resorts The Walt Disney Company brings iconic stories, franchises and characters to life through theme parks, resorts, cruise ships, vacation experiences and consumer products around the globe. Their Florida division is also committed to strengthening their workforce with career development opportunities for employees. Disney recently implemented another round of layoffs due to slowed growth in their streaming business, mirroring competitor actions taken by Warner Bros and Discovery to reduce content spending and transition toward ad-supported offerings - in an attempt to remain competitive and profitable. Disney is cutting about 7,000 jobs as part of an effort to save $5.5 billion annually, with ESPN and Disney Parks, Experiences and Products set to begin reducing staff levels beginning next week. Affected employees will be informed during this week and ESPN is reported as prioritizing management positions rather than on-air talent for removal. Disney CEO Bob Iger issued a memo to employees outlining that Disney will be restructuring and rationalizing costs to "put decision-making back in the hands of our creative teams" while concentrating on its core strengths. Iger has made it clear that any hiring freeze implemented by his predecessor Bob Chapek would remain in place while they assess cost structure of their organization. Iger has made his intentions clear that Disney Entertainment must increase profitability as it competes against other media giants to woo subscribers to its subscription offerings. Dana Walden and Alan Bergman, co-chairs of Disney Entertainment, noted in a conference call last month that this environment requires tough decisions for them as co-chairs of Disney Entertainment. Disney has enjoyed tremendous success in the booming subscription-video on-demand market, yet its stock has struggled this year amid fears that the current e-commerce boom may wane and lead to a decrease in subscriber growth for all companies in its sector. Disney shares fell further after Netflix missed Wall Street's latest earnings estimate on Tuesday; investors became concerned other media companies may reduce content investments as a result. While investors remain wary, some hope remains for Disney's future amid plans to invest in parks and promote their renowned brands. Yet on Wednesday afternoon the stock took another dive. Corporate Disney is cutting thousands of jobs to save $5.5 billion as they attempt to turn their streaming service profitable. Recently, they reduced their dividend payout by 80% to try and cut losses as competition with other media companies has seen subscriber growth slow while handling higher costs associated with digital video platforms. Disney announced in February that they planned to reduce their workforce by 7,000 workers across multiple divisions and corporate functions to meet a savings goal. The first round of pink slips went out this week; another wave should follow later in April or during summer break-up. According to CEO Bob Iger, layoffs will not all fall at once but rather spread out among each division or department individually. Iger has stated that his cuts will primarily impact Corporate, which includes HR and finance departments. As part of his motivations for making these adjustments, he desires for cost management to become more streamlined within his corporate structure. Individuals impacted will be informed of their status this week and encouraged to seek support from either their leader or HR partner if necessary. They may find out their job has been eliminated entirely, or their company may shift them into a different role altogether. As Iger attempts to shift focus of his company toward its "core brands", such as Star Wars, Marvel and Pixar--emphasizing Star Wars, Marvel and Pixar as examples--his new plan may leave ESPN responsible for general entertainment content creation. ESPN currently uses existing IP assets for monetisation while producing original shows for its streaming services. As Disney engages in a proxy battle with activist investor Nelson Peltz and Trian Management - who hold a minority stake - Trian Management wishes for Iger to be replaced with board member Dan Loeb; Peltz criticizes spending at Disney while asserting it should return its attention back on core businesses. Sports The Walt Disney Company is reported to be cutting thousands of jobs globally, with the first round of layoff notices likely going out this week. Most likely affected are staffers at ESPN and related sports media businesses - particularly Jimmy Pitaro-run ESPN according to sources. Disney announced in February that they would reduce employee numbers through either leaving open positions unfilled or dismissals; Disney CEO Bob Iger sent out a memo this Monday detailing three rounds of layoffs this year. While their goal of $5.5 billion savings remains unrealized at present, they remain confident that eventually it will reach that figure. No doubt about it: the entertainment industry is struggling. With Netflix and Amazon Prime offering cheaper ad-supported options to compete with traditional pay TV and cable networks, such as Disney and other major media companies have had to change their focus from subscriber growth towards profitability as opposed to expansion, leading them to reduce content spending as they adapt their business models for greater financial responsibility. Disney is now making preparations to reduce costs as part of its 2020 fiscal year plan, expecting to announce an estimated total of 7,000 job cuts as part of their ongoing effort to streamline operations amidst increased competition and decreasing revenue streams. As well as cutting its workforce, the company will also reduce costs by cutting content spending. Instead, its focus will be on expanding ad-supported streaming services and increasing international viewership. Even though Disney has yet to comment on rumors of layoffs, shareholders have put pressure on it to boost profits and improve returns. Activist investor Nelson Peltz has been pushing hard for a seat on Disney's board due to acquiring 21st Century Fox as being detrimental to stock prices and leading to underperformance of stock. Disney has undertaken several cost-cutting initiatives since buying out 21st Century Fox in an attempt to boost its profits and increase bottom lines. Plans include selling off assets and restructuring their business. The forthcoming layoffs are just the latest example.

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