In his first earnings call since returning to Disney, CEO Bob Iger announced plans to cut 7,000 jobs as part of a companywide restructuring move.
What You Need To Know
- Disney CEO Bob Iger, who returned in November, announced a companywide restructuring plan, including job cuts
- The parks division reported $8.7 billion in revenue; $3.1 billion in operating income
- Disney plans to continue to invest in parks; attendance grew at Disney World and Disneyland
- RELATED: Disney World 'monitoring' proposed Reedy Creek legislation
On Wednesday, Iger unveiled the company’s plans to restructure into three business segments — Disney Entertainment, ESPN and Disney Parks, Experiences and Products — to sustain growth and profitability. As part of the restructuring, Disney is looking to cut $5.5 billion in costs and slash jobs. Iger didn’t specify where those job cuts would occur.
"After a solid first quarter, we are embarking on a significant transformation, one that will maximize the potential of our world-class creative teams and our unparalled brands and franchises," Iger said in a statement before the call.
The move comes as Disney's parks business continues to soar. The Parks, Experiences and Products division—which includes Disney Cruise Line and Disney’s merchandise business — saw a 21% increase in revenue to $8.7 billion in the first quarter. Operating income increased 25% to $3.1 billion.
The company said the guests spent more money while visiting its parks, including on services such as Genie+. Disney’s U.S. parks — Disney World and Disneyland — also saw growth in attendance.
On the first quarter earnings call Wednesday, chief financial officer Christine McCarthy said park attendance at both resorts are “pacing above [the] prior year.”
With the parks largely recovered from pandemic impacts, Disney plans to continue to invest in its parks. Iger, who returned in November to replace Bob Chapek, announced that an Avatar experience is in the works for Disneyland. Although Iger didn’t provide details, he said more will be shared “very soon.”
Iger also said on the call that he talked with Disney Parks chairman Josh D’Amaro about adding other franchises in the parks.
“I talked to Josh D’Amaro about this very recently…to carefully look at all the great franchises of the company, and see where we can invest them in the parks to increase capacity, while preserving guest satisfaction,” Iger said.
The announcements also come as Disney deals with possible changes to Disney World’s Reedy Creek Improvement District. This week, Florida lawmakers moved forward with plans to reestablish the district with a number of changes, including a new name and how board of supervisors are selected.
In a statement, Disney World president Jeff Vahle said the company is “monitoring” the legislation that was filed earlier in the week.
Disney World and the unions that represent more than 40,000 members of its workforce will also soon return to the negotiating table on a contract offer. Unionized workers recently rejected a contract proposal from the company that would have given them at least a $1 an hour per year raise.