The Walt Disney Company said it will be reorganizing into three divisions: Entertainment, ESPN and parks and experiences. According to the company, Disney will slash 7,000 jobs from its workforce and plans to cut $5.5 billion in costs, including $3 billion in content savings.
Orlando, February 20 (RHC)-- The Walt Disney Company said it will be reorganizing into three divisions: Entertainment, ESPN and parks and experiences. According to the company, Disney will slash 7,000 jobs from its workforce and plans to cut $5.5 billion in costs, including $3 billion in content savings.
The layoffs were praised by the business community, including the billionaire hedge fund investor Nelson Peltz, who had been aggressively pushing for Disney to slash costs and restore dividend payouts to shareholders.
Meanwhile, at Disney World in Orlando, Florida — the biggest single-site employer in the U.S. — workers have been battling management as they try to negotiate a new union contract. Workers recently rejected Disney’s offer of a $1 first-year raise by a whopping 96 percent, demanding $3 instead.
All this comes against the backdrop of soaring inflation and rising rents that Disney World workers say have eaten away at the purchasing power of their pay — not to mention repeated instances of customers assaulting cast members.
The move marks the most significant action Bob Iger has taken since returning to the company as CEO in November. Disney announced the changes minutes after it posted its most recent quarterly earnings. The announcements also come as Disney engages in a proxy fight with activist investor Nelson Peltz and his firm Trian Management.
Nelson Peltz is the billionaire head of Trian Partners, a New York-based hedge fund that has a long history of activist investing in big, public-facing companies like Domino’s Pizza, Family Dollar and Procter & Gamble. He goes after corporations that are vulnerable and tries to invest — and elbow — his way into board seats that he uses to push companies to restructure to the benefit of shareholders.
To say the least, Peltz is a controversial figure. He’s long been an arch-rival of the Coalition of Immokalee Workers (CIW), the well-known human and farmworker rights organization. Trian is the top shareholder at Wendy’s and Peltz chairs the company’s board. Wendy’s has been a rare holdout in joining the CIW’s celebrated Fair Food Program, and the group has protested Peltz for years.
Moreover, Peltz was a major backer of Donald Trump, personally hosting a lavish, $10 million fundraiser for Trump’s reelection at his $136.4 million Palm Beach estate. The two are neighbors and friends and have praised each other in public.
During its quarterly earnings call with investors, Disney also announced it would be cutting $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 cuts. Disney executives said about $1 billion in cost cutting was already underway since last quarter.
Disney also said it would be eliminating 7,000 jobs from its workforce. That would be about 3% of the roughly 220,000 people it employed as of October 1st, according to an SEC filing, with roughly 166,000 in the U.S. and about 54,000 internationally.
