The Walt Disney Company’s last quarter wasn’t as profitable as some investors expected, and stock value for Disney dropped dramatically during their quarterly earnings call. But what effect does that have on the company itself?
With major losses in streaming, Disney is looking at cost-cutting options to keep profits up, and it looks like they might have just decided on one major way to save some money.
CNBC obtained an internal memo that Disney CEO Bob Chapek sent out to division leaders on Friday, November 11th. In the memo, Chapek announced that Disney will “institute a targeted hiring freeze.” The timing of this decision seems to correlate with the release of last quarter’s disappointing results.
Chapek said, “We are limiting headcount additions through a targeted hiring freeze. Hiring for the small subset of the most critical, business-driving positions will continue, but all other roles are on hold.” He also mentioned that job cuts could be part of this change: “We do anticipate some staff reductions as part of this review.” Other major media companies (like Netflix) have been experiencing layoffs recently.
During Disney’s last earnings call, CFO Christine McCarthy said that Disney is “actively evaluating our cost base currently, and we’re looking for meaningful efficiencies.” Those changes are meant to “provide some near-term savings” as well as “drive longer-term structural benefits.”
Although Disney+ has continued to gain more subscribers, the streaming service (combined with Hulu and ESPN+) lost $1.47 billion last quarter. Disney executives expect the losses to lessen next year, and they’ve predicted that Disney+ will “become profitable by the end of 2024.”
We’ll keep an eye out for updates about this situation and let you know about any news, so stay tuned to DFB.
Join the DFB Newsletter to get all the breaking news right in your inbox! Click here to Subscribe!