According to a leaked memo by CNBC, Disney CEO Bob Chapek predicts “some headcount reductions” once the company reviews its spending. Reportedly the company will also freeze most hiring, only bringing in new employees for “the most critical, business-driving positions.”
If Disney goes through a round of layoffs, it will be far from alone among the companies powering streaming services. This year, dozens of workers have lost their jobs at Warner Bros Television and HBO Max. Netflix also laid off hundreds of employees this year and reported slower subscriber growth, but noted during the latest earnings call that its business remains profitable, unlike its premium streaming competitors, which include Disney.
Chapek has forecast that the services will be profitable by the end of 2024. So far, there are no details on how many workers may be affected, as Disney will begin by forming a “cost structure taskforce” to review its finances. However, the possibility of layoffs loomed after her earnings call on Tuesday when CFO Christine McCarthy said Disney was “actively evaluating our cost base currently, and we’re looking for meaningful efficiencies.”
The company is also tightening its belt in other ways, with Chapek’s memo telling employees to hold business meetings virtually when they can to cut travel expenses.