Disney Announces Layoffs and Hiring Freeze

WISCONSIN (CoinChapter.com) — Disney (NYSE: DIS) announced they are going to lay off an undetermined number of workers and, in addition, put a hiring freeze in place.

The news came after Disney stock sunk to a one-year low of $86.75 per share. CEO Bob Chapek sent a letter to company executives explaining the economic uncertainties, cost-cutting measures needed, and the difficulty in this decision.

Disney has 190,000 employees, most of which will not be affected by the layoffs. However, Disney’s employees are no strangers to layoff notices as not too long ago, 32,000 workers were furloughed in late 2020.

The Walt Disney Company stock has been thrashed all year long. 

Early this year, on Jan 11, shareholders were riding high on a $157.89 share price. Hopes were high for more gains after a huge Q4 beat in 2021. At that time, the end-of-year consensus called for $0.57 per share earnings, and instead, investors got a pleasant surprise of $1.06 per share, or 85.96% higher than estimated.

Mr. Chapek said it is important to administer a cost structure taskforce; he wants to make Disney profitable again. 

Ownership

Disney is the primary owner of streaming services Hulu with a 66% share (Comcast owns the remaining 33%) and ESPN+ (80% owns ESPN, while Hearst owns the other 20%). Employees are disappointed at the timing of layoffs and a hiring freeze because Thanksgiving and Christmas are before us.

At the forefront of their minds, company executives know they have a growing Disney Plus subscriber base. 

Since Q1 2020, subscribers have been piling on every quarter without looking back. Streaming service customers have grown from 26.5 million in this brief period to 164.2 million. If success continues, Disney can likely return to top form next year.

The layoff news certainly takes some holiday joy out of people, but hopefully, they can recover well through Disney’s re-hiring or temporary employment elsewhere.