The Walt Disney Co (NYSE: DIS) stock price has risen 6.96% this year despite announcing plans to eliminate 7,000 roles in a bid to reduce its operating costs by up to $5.5 billion. The company has already started notifying the affected employees of their fate. The latest news indicates that the firm has fired its metaverse team.
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Bob Iger, the Disney CEO, said that firing employees was not an easy decision and warned the remaining employees that everything would be much more challenging after the departure of their colleagues. While the first round of layoffs has started, the company expects to lay off a second batch of employees in April, while the third round will be just before the summer.
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Since returning to the company in November 2022, Iger has been tasked with reviving the media and entertainment giant. Most of his attention has been focused on the C-suite, where Alan Bergman and Dana Walden will be co-chairs of Disney Entertainment, including its entire portfolio of global entertainment media and content businesses, including streaming.
Iger appointed Jimmy Pitaro to keep serving as ESPN chairman, overseeing ESPN+, ESPN Networks, and its international sports channels. Furthermore, Josh D'Amaro will remain chairman of Disney Parks, Experiences and Products.
Part of Iger’s plan for Disney is to link the company’s content decisions to its financial performance. Iger expects Disney+, its streaming service, to become profitable in 2024 as losses continue shrinking.
In an internal memo seen by reporters, Bob Iger said: “The difficult reality of many colleagues and friends leaving Disney is not something we take lightly. In tough moments, we must always do what is required to ensure Disney can continue delivering exceptional entertainment to audiences and guests around the world – now and long into the future.”
Disney’s layoffs come amid massive layoffs by other leading American companies that have been hit hard by the challenging economic environment. The high interest rates and record-high inflation that has seen many consumers and businesses cut their discretionary spending.
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Disney stock price.
The Disney stock price is up 6.96% in 2023, but it could be trading much higher were it not for the recent pullback.
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