News: Disney begins third round of layoffs as it aims to cut 7,000 jobs by summer, report says

Disney (DIS) has reportedly initiated its third and final phase of layoffs this week as part of its plan to reduce 7,000 jobs by the summer.

According to Deadline, more than 2,500 positions will be affected across the entire company. The parks and resorts division will see minimal impact, and the television division will largely remain unaffected.

Analysts have expressed concerns about Disney's near-term uncertainties, including declining linear networks, challenges in the direct-to-consumer market, and a slowdown in the parks business. Additionally, an ongoing writers' strike has led to production shutdowns in the industry. While Disney shares have risen modestly by 3% year-to-date, the S&P has increased by nearly 10%.

In February, Disney announced its plan to cut 7,000 jobs as part of broader cost-cutting and restructuring efforts. The first round of layoffs took place at the end of March, followed by the largest round in late April.

Following recent price hikes, Disney stock experienced its largest decline in six months when it reported a loss of 4 million Disney+ subscribers in the fiscal second quarter.

Streaming losses in the quarter narrowed to $659 million, surpassing consensus estimates of $850 million, compared to a loss of $887 million in the same period last year. In Q1, Disney reported a streaming loss of $1.1 billion, followed by a $1.5 billion loss in Q4.

Disney has reiterated its plans to reduce costs by $5.5 billion, including $3 billion in content costs. The company confirmed during its latest earnings call that it will incur a content impairment charge between $1.5 billion and $1.8 billion as it removes multiple series and specials from Disney+ and Hulu.

Several titles, such as "Willow," "Big Shot," and "The Mighty Ducks: Game Changers" on Disney+, and "Dollface" and "Y: The Last Man" on Hulu, are set to be removed from the respective streaming services on May 26, according to Deadline.

Last week, Disney also scrapped its plans to relocate employees from California to Florida and build a new campus in Orlando's Lake Nona region, amid an ongoing dispute with Florida Governor Ron DeSantis.

In an interview at JPMorgan's Global Technology, Media & Communications Conference, Josh D'Amaro, chairman at Disney Parks, Experiences, and Products, stated that the decision was influenced by changes in leadership and business conditions. He reassured employees that the company still intends to invest $17 billion in Walt Disney World over the next decade.

D'Amaro emphasized that the conflict with DeSantis has not impacted Disney's business results, highlighting the strong performance of the theme park division, which generated $2.17 billion in operating income in the quarter. He expressed enthusiasm about future plans in Florida, stating, "I'm excited about what's in store."