Disney Chief Executive Bob Chapek has sent a memo to company leaders directing a hiring freeze and the possibility of “small headcount reductions” in the coming months.
On Friday, it was revealed that Disney plans to freeze hiring for the rest of the year and could possibly lay off some workers, in one of its efforts to make its Disney+ streaming service even more profitable.
In a memo presented by Reuters and first reported by CNBC, Chief Executive Bob Chapek sent the memo to Disney leaders, mentioning that the company is instituting a specific hiring freeze and anticipates “some small headcount reductions.” , in a way to reduce the company’s costs that allow it to sustain its streaming service.
“While certain macroeconomic factors are beyond our control, achieving these goals requires all of us to continue to do our part to manage the things we can control, in particular, our costs,” Chapek wrote in the memo.
Chapek said Disney has established a task force, which includes CFO Christine McCarthy and General Counsel Horacio Gutierrez, to help him make “critical big picture decisions.”
The company has already begun considering spending on content and marketing, but Chapek said the cuts would not sacrifice quality. Hiring will be limited to a small subset of critical positions, with some headcount reductions anticipated as the company seeks to become more profitable, Chapek wrote.
Last Tuesday, Disney presented Wall Street’s quarterly earnings estimates, which fell short of its estimates. The entertainment giant racked up more losses from its push into streaming video, which it refers to as its direct-to-consumer (DTC) business. Shares of the company fell more than 13% on Wednesday after its results.
Disney reported that the fast-growing service added 12 million subscribers in its fiscal fourth quarter, but reported an operating loss of nearly $1.5 billion. According to the company, Disney+ would be profitable in fiscal 2024, with losses peaking in the quarter.
Among the most representative original content of the platform are:
- StarWars
- The Mandalorian
- Andor
- Obi-Wan Kenobi
- Wanda Vision
- Hawkeye
- She-Hulk
- Among other series and movies from Disney, Pixar, Marvel and Star Wars.
If what the memo mentions is carried out, Disney would join large companies like Meta that have recently announced their own wave of layoffs, in the same determination to control operating costs.
“Our transformation is designed to ensure that we thrive not just today, but well into the future,” Chapek concluded.