Disney Plans Hiring Freeze and Job Cuts

Disney is a not-so-happy place as it plans to institute a targeted hiring freeze as well as some job cuts, according to an internal memo sent to executives, reports CNBC.

“We are limiting headcount additions through a targeted hiring freeze,” CEO Bob Chapek said in a memo to division leads sent Friday and obtained by CNBC. “Hiring for the small subset of the most critical, business-driving positions will continue, but all other roles are on hold. Your segment leaders and HR teams have more specific details on how this will apply to your teams.”

He added: “As we work through this evaluation process, we will look at every avenue of operations and labor to find savings, and we do anticipate some staff reductions as part of this review.” Disney has approximately 190,000 employees.

Chapek also told executives business travel should be limited to essential trips only. Meetings should be conducted virtually as much as possible, he wrote in the memo.

Disney is also establishing “a cost structure taskforce” to be made up of Chief Financial Officer Christine McCarthy, General Counsel Horacio Gutierrez and Chapek.

“I am fully aware this will be a difficult process for many of you and your teams,” Chapek wrote. “We are going to have to make tough and uncomfortable decisions. But that is just what leadership requires, and I thank you in advance for stepping up during this important time.”

The moves come after Disney reported disappointing quarterly results. Shares of the company fell sharply Wednesday, hitting a new 52-week low, before rebounding later in the week.

McCarthy said during Disney’s earnings call Tuesday that the company was looking for ways to trim costs.

“We are actively evaluating our cost base currently, and we’re looking for meaningful efficiencies,” she said. “Some of those are going to provide some near-term savings, and others are going to drive longer-term structural benefits.”

Disney’s streaming services lost $1.47 billion last quarter, more than double the unit’s loss from a year prior. McCarthy said losses will improve in 2023, and Chapek has promised streaming will become profitable by the end of 2024.

Other large media and entertainment companies, including Warner Bros. Discovery  and Netflix, have cut jobs this year as valuations have slumped. Disney hasn’t announced any plans to eliminate jobs.