Walt Disney Co. is preparing significant budget cuts at its Disney/ABC Television Group that will include staff reductions and restructurings, people familiar with the matter said.
According to The Wall Street Journal, the bulk of the cuts are expected to take place at the ABC broadcast network, its television production studio, ABC News and local television stations. Cable networks Disney Channel and Freeform will also likely see their workforces reduced as well, the people said.
Overall, the cuts are expected to represent 10% of the unit’s annual costs and will identified by the end of September, which concludes Disney’s current fiscal year.
The cable-sports unit ESPN, which is enduring its own tough times with declining ratings and subscribers, is not part of the Disney/ABC TV Group but has also endured employee reductions this year.
The cuts are being orchestrated by Ben Sherwood, president of the Disney/ABC TV Group. He had promised Disney Chief Executive Robert Iger that he could shave up to $300 million in costs, one person said. Mr. Sherwood has told staffers the unit has to “transform into a 21st century broadcaster” and learn to do more with less, according to an executive.
Details of where the cuts will come from and what will be restructured are still being hammered out. Mr. Sherwood is expected to present Mr. Iger a plan in the coming weeks.
The moves come as Disney’s ABC broadcast network and its major cable channels have struggled to find new hit shows. ABC finished last season third in viewers behind CBS and NBC and was also down 11% in the adult 18-49 demographic that advertisers favor.