John Paul M. Joaquin Culture 11.13.2022 23:Nov PM EST

Disney To Conduct Freeze Hiring, Layoffs, Cost Cuts per Company Memo

It seems the happiest place on Earth is also affected by revenue loss.

Disney CEO Bob Chapek recently sent out a company memo to its employees revealing that it will implement "difficult" cost-cutting measures in the coming weeks.

This announcement is in contrast to Disney's success in its streaming services, which could rival Netflix's subscriber count should they be combined.

Disney Cost Cutting Details

Chapek mentioned in the internal memo that the cost-cutting measures he intends to implement are employee layoffs and hiring freezes to cut back on costs due to operating losses, per IGN.

He also mentioned that he would be limiting company travel to essential trips only as part of Disney's cost-cutting measures too, with meetings being conducted virtually as much as possible.

Chapek is aware that the measures he intends to implement will put Disney's employees on a "difficult process," but he reasoned that making the "tough and uncomfortable decisions" is what leadership requires.

Not every department will be affected by the hiring freeze, with the recruitment to fill the most critical, business-driving positions guaranteed to continue, per CNBC.

In addition to the previously mentioned cost-cutting measures, Chapek will also put the company's content and spending under review of its newly formed cost structure task force, which includes CFO Christina McCarthy, general counsel Horacio Gutierrez, and himself.

The cost-cuttings, though surprising, are expected on Disney's part. The company reported disappointing earnings for the previous fiscal quarter despite seeing an increase in subscribers in its streaming services.

However, the company's operating loss from streaming went from $0.8 billion to $1.5 billion, according to Engadget. Fortunately for the company, these expenses would soon be lessened through price hikes in its streaming services and the launch of its ad-supported tiers on Disney Plus.

Additionally, McCarthy said during Disney's latest earnings call that it was looking for ways to cut costs where it could She also added that the cost structure task force was looking for meaningful efficiencies to provide near-term savings and drive longer-term structural benefits.

As a result, Chapek is confident Disney, as a company, will reach its goal of being a profitable company come the end of 2024. Nevertheless, it seems likely that the cost-cutting won't stop anytime soon until Disney reaches its goal.

Other Affected Companies

Disney is one of the latest companies that took losses and a hiring freeze due tot he ongoing inflation issue and the resulting economic downturn. You may remember that Meta CEO Mark Zuckerberg laid off 11,000 of his employees due to the company's shares dipping by nearly 20% and the rising costs and expenses increasing by 19% year over year.

Twitter, now led by the Big Twit himself, Elon Musk, also laid off many of its employees to improve the company's cashflow and increase its profitability.

These layoffs affected many of Twitter's leadership, including Parag Agrawal, Twitter's former CEO, and Ned Segal, the company's former CFO.