Disney profits shine but still lays off 7,000 employees to cut $5.5 billion in costs

Feb 9, 2023

By: Rahul Verma

Disney profit tops estimates

Disney reported a first-quarter profit of 99 cents per share, which exceeded the estimated 77 cents per share predicted by analysts surveyed by Visible Alpha. Despite a 7 percent decrease in profit compared to the previous year, the company experienced an 8 percent increase in revenue.

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Loss of subscribers

Disney announced its Q1 2023 earnings today, reporting 161.8 million Disney global subscribers, a decrease of 2.4 million subs from 164.2 million in the previous quarter.

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Gain in domestic subscribers

On the semi-positive side, Disney gained 200,000 domestic subscribers in the U.S. and Canada.

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Layoffs amid to cut costs

Disney will reduce its workforce by 7,000 in a bid to cut costs. The figure represents 3.2 percent of Disney’s total headcount of about 220,000 worldwide as of Oct 1, 2022.

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What helped Disney?

Theme parks powered the profitable results, while television profit helped to offset losses at Disney .

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Focus on three new divisions

As part of the restructuring, Disney's CEO announced the formation of three distinct divisions within the company: an entertainment division that encompasses its primary television, film, and streaming operations, the ESPN sports network division, and a theme park division that encompasses cruise ships and consumer products.

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Disney’s growing dominance

Disney owns shares in ESPN, and in 2019, the company completed the 21st Century Fox acquisition a decade after acquiring Marvel Entertainment. Additionally, it added LucasFilm Ltd to its portfolio.

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Cost cutting efforts

The job reductions are part of a cost-saving initiative that was also announced on Wednesday. According to CEO Bob Iger, the company aims to achieve $5.5 billion in cost savings, with $2.5 billion generated from annual savings in non-content operations.

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Popular content on Disney Plus

Both ‘The Mandalorian’ and ‘WandaVision,’ only available on Disney , were among the top five most popular original streaming series in the United States and the United Kingdom.

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