The Walt Disney Company will begin laying off people after shares plummeted this week, according to reports.
In a memo obtained by Variety, Disney CEO Bob Chapek said that it is likely layoffs will have to happen at the company following a disappointing fiscal fourth-quarter.
“I am fully aware this will be a difficult process for many of you and your teams,” Chapek stated on Friday. “We are going to have to make tough and uncomfortable decisions. But that is just what leadership requires, and I thank you in advance for stepping up during this important time. Our company has weathered many challenges during our 100-year history, and I have no doubt we will achieve our goals and create a more nimble company better suited to the environment of tomorrow.”
During this process, Disney will be conducting a “rigorous review of the company’s content and marketing spending,” which will be led by the newly formed “cost structure taskforce,” composed of Chapek, CFO Christina McCarthy, and general counsel Horacio Gutierrez.
“First, we have undertaken a rigorous review of the company’s content and marketing spending working with our content leaders and their teams. While we will not sacrifice quality or the strength of our unrivaled synergy machine, we must ensure our investments are both efficient and come with tangible benefits to both audiences and the company,” the memo read.
The company will also implement a targeted hiring freeze and limit company travel in an effort to cut costs.
“Second, 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. Your segment leaders and HR teams have more specific details on how this will apply to your teams,” Chapek continued.
These moves come after Disney’s quarterly earnings results saw an operating loss for its streaming entertainment services of $1.47 billion, putting the company’s future profitability into question.
Disney stock also collapsed to 13.16 percent on Tuesday thanks to the earnings miss, marking the lowest drop in two years. While the company is down significantly, the broader S&P 500 index, meanwhile, has dropped by 20 percent.
