The Walt Disney Co. is getting slimmer again under Chief Executive Josh D’Amaro, whose latest restructuring round at the Burbank-based entertainment giant lays off 300 employees.
This round will affect mostly technology and human resources roles, Deadline first reported. It would not impact Disney Entertainment Television, led by new department head Debra OConnell. Motion pictures are also mostly spared.
Together with a 1,000-job shred in April and further cuts in Pixar and National Geographic, the new round represents the fourth streamlining effort after D’Amaro took the helm in January.
“We remain highly focused on reducing costs across the enterprise to create incremental capacity to invest for growth and are evaluating a variety of levers, including reductions in labor and SG&A,” an August letter to Disney shareholders said. “We are mid-stream in this work and will provide future updates on our progress.”
The round has been partially signaled by Horacio Gutierrez, chief legal and global affairs officer at Disney, in a Sept. 18 memo to internal staff. He warned about shrinking the department in a “transformation process,” which includes “automating certain workflows by leveraging the latest technologies.” The warning was first reported by Deadline.
As of Sept. 30, Disney has not yet filed a Worker Adjustment and Retraining Notification with the California Employment Development Department.
‘One Disney’
Having cut down staff sizes across multiple teams – including Marvel, ESPN, marketing, film studios and other corporate departments – D’Amaro seems committed to his “One Disney” vision, where he breaks down barriers between its assets to form an increasingly cohesive business.
That vision has technology at its core. D’Amaro stated on his first day as chief executive that Disney would embrace technology to “unlock new possibilities,” a priority affirmed by recent collaborations with OpenAI Group and NVIDIA Corp. across artificial intelligence and the robotics industry.
Though having since pulled out of the OpenAI deal when the latter shut down its video generation tool “Sora” in March, Disney is still forging ahead in the tech realm. The company additionally appointed Karandeep Anand in the newly created role of chief technology officer last month, effective early October. He has most recently served as the chief executive of Character Technologies Inc. – which does business as Character.AI – and worked in leadership roles at financial technology enterprise Brex Inc. and Facebook.
Shifting priorities cost money, and some analysts believe the layoffs make up for it. GuruFocus analyst Moz Farooque wrote that the latest round “underscore Disney’s push to streamline operations,” giving the company more money to allocate at an inflection point “as traditional entertainment businesses confront mounting competition and technological disruption.”
That follows Disney’s effort to boost its stock prices, which took a significant hit after reaching its peak during the COVID-19 pandemic at $201.90 per share on the massive popularity of Disney+. It closed at $104.9 per share on Sept. 30 this year.
D’Amaro’s reign is seeing some success, however. In the third quarter, the company posted $25.2 billion in revenue, a 7% increase driven by growth in experiences and entertainment subscriptions. The entertainment segment, furthermore, gathered $1.68 billion in operating income – a 64% increase year-over-year thanks to higher subscription and affiliate fees.
The chief executive attributed that to a business model that prioritizes leveraging its intellectual property, homing in on technology and creating a more integrated, all-round experience for consumers under “One Disney”.
Take “Toy Story 5,” for example. The animated blockbuster that generated about $1.14 billion in global box office since its release in June has in turn given Disney over $1 billion in annual global retail sales, D’Amaro said. The single intellectual property has transformed into a powerful magnet that sparks business everywhere – in Disney Parks, cruise ships, four immersive lands, 19 attractions and two hotels.
“Now that’s the Disney flywheel in action, one powerful and enduring story told across theaters, streaming, retail, and physical experiences,” D’Amaro said during the August earnings call with analysts. “That integration creates a structure no one else has been able to replicate.”
