Disney plans hiring freeze, layoffs and cost cuts, according to a memo from CEO Bob Chapek

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disney
plans to introduce a targeted hiring freeze as well as job cuts, according to an internal memo sent to executives.

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

He added: “During this evaluation process, we will be looking at all operational and workforce options to find funds for savings, and we expect staff reductions as part of this examination. Disney has approximately 190,000 employees.

Capek also told executives that business travel should be limited to only essential trips. Meetings should be held as virtually as possible, he wrote in a memorandum.

Disney is also creating a “Cost Structure Task Force” that will include Chief Financial Officer Christine McCarthy, General Counsel Horacio Gutierrez and Chapek.

“I am fully aware that this will be a difficult process for many of you and your teams,” Capek wrote. “We will have to make difficult and uncomfortable decisions. But that’s exactly what leadership requires, and thank you in advance for activating at this important time. »

The changes come days after Disney announced disappointing quarterly results. Shares of the company fell sharply on Wednesday, hitting a new 52-week low before rebounding later this week.

McCarthy said during Disney’s earnings call on Tuesday that the company is looking for ways to cut costs.

“We are currently actively evaluating our cost base and looking for significant efficiencies,” she said. “Some of them will bring short-term savings, while others will bring long-term structural benefits.”

Disney’s streaming services lost $1.47 billion last quarter, more than double the division’s year-over-year loss. McCarthy said losses would decline in 2023, while Capek promised that by the end of 2024 streaming would be profitable.

Other major media and entertainment companies, including Warner Bros. Discovery.
and Netflix
cut jobs this year as grades plummeted. Disney has not announced any job cut plans.

Read Čapek’s memo here:

Disney executives-

As we begin fiscal 2023, I want to speak directly to you about the cost management efforts that Christine McCarthy and I mentioned in this week’s income statement. These efforts will help us achieve our important goal of achieving profitability for Disney+ in fiscal year 2024 and making our business more efficient and agile overall. This work takes place in a context of economic uncertainty with which all companies and our industry are struggling.

Although some macroeconomic factors are beyond our control, to achieve these goals we must all continue to do our part to manage what we can control, including our costs. You will all play a vital role in this effort, and I know that you, as senior leaders, will achieve your goals.

To be clear, I have confidence in our ability to achieve the goals we have set for ourselves and in this management team to lead us there.

To help us with this, I created a cost structure working group made up of executive directors: our Chief Financial Officer Christine McCarthy and Chief Legal Officer Horacio Gutierrez. With me, this team will make important joint decisions necessary to achieve our goals.

We are not starting this work from scratch and have already mapped out some next steps that I would like you to hear directly from me.

First, we conducted an in-depth analysis of the company’s content and marketing spend by working with our content managers and their teams. While we make no compromises on the quality or strength of our unparalleled synergy machine, we must ensure that our investment is worth it and delivers measurable value to both the public and the company.

Second, we are limiting headcount growth through a targeted hiring freeze. Recruitment for a small number of critical and business-critical positions will continue, but all other p

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