Walt Disney Co. (DIS) issued fourth quarter earnings that beat Wall Street forecasts and announced a massive reorganization of its operations that includes thousands of job cuts.
Specifically, Disney said that it will restructure into three business segments while eliminating 7,000 jobs and cutting costs by $5.5 billion U.S.
Going forward, Disney will operate under three divisions: Disney Entertainment, which includes most of its streaming and media operations, an ESPN division that includes the TV network and the ESPN+ streaming service, and a Parks, Experiences and Products division.
Disney also announced plans to cut $5.5 billion in costs, which will be made up of $3 billion from content, excluding sports, and the remaining $2.5 billion from non-content expenses.
The 7,000 job cuts represent about 3% of the roughly 220,000 people Disney employed as of last year, with about 166,000 employees in the U.S. and 54,000 internationally.
The cost cuts and restructuring were announced alongside Q4 earnings that came in at $0.99 U.S. per share for the three months ended December 31, 2022. The company’s revenue grew 7.8% to $23.5 billion U.S. during the quarter.
Both the top and bottom lines were above analysts’ expectations.
The restructuring of Disney is the most significant action taken by chief executive Bob Iger since he returned to lead the company last November.
The changes also come as Disney engages in a proxy fight with activist investor Nelson Peltz and his firm Trian Management that is pushing for efficiencies at the Mouse House.
Disney’s stock has decreased 24% over the last year to trade at $111.78 U.S. per share
