Disney weighs thousands of job cuts, asks managers to target 20% cost savings

Walt Disney is considering cutting thousands of jobs and has asked some managers to target 20 percent in annual cost savings, Bloomberg News reported, citing people familiar with the matter. The savings could come from job eliminations as well as from reductions in other expenses, according to Bloomberg's sources, who asked not to be identified because the discussions are private. The reported restructuring effort comes as Disney navigates multiple challenges, including the growing use of artificial intelligence, weaker box-office performance, intensifying competition from streaming rivals and a slowdown in international attendance at the company's theme parks.

Disney layoffs: Managers asked to find 20% savings

According to the report, Disney has directed some managers to target annual cost reductions of 20%. The savings could come from a combination of job cuts and other expense reductions across the business. The report added that not all parts of the company will be affected equally. Some Disney operations are expected to shoulder a larger share of the cuts than others as the company reviews spending across its businesses.

Disney CEO Josh D'Amaro plans reinvestment

The move comes under the leadership of Josh D'Amaro, who is reportedly seeking to redirect part of the savings into strategic growth areas. These include film and television programming, technology initiatives, theme parks and Disney's cruise business. The company has pledged to deliver double-digit growth in adjusted earnings per share during the current fiscal year, making cost controls and operational efficiency a key focus.

Disney lays off hundreds of employees, this is third round of job cuts this year

In related news, Disney laid off hundreds of employees across several departments in September this year. The third round of job cuts this year mainly affected human resources and IT teams across Disney's corporate operations and different business divisions. Announcing the job cuts, Disney CEO Josh D'Amaro and CFO Hugh Johnston shared a letter to the shareholders. The layoffs come after Disney warned shareholders in August that it was looking at more ways to reduce costs, including possible cuts to its workforce. The company had already announced major job reductions in April and July, followed by early-retirement offers to some longtime executives in August.

What did Disney CEO Josh D'Amaro tell shareholders

Disney's latest layoffs come after D'Amaro and CFO Hugh Johnston signalled that more cost-cutting measures were being considered. In a letter to shareholders on Aug. 5, the executives wrote: "We remain highly focused on reducing costs across the enterprise to create incremental capacity to invest for growth and are evaluating a variety of levers, including reductions in labor and SG&A." They added: "We are mid-stream in this work and will provide future updates on our progress. " SG&A refers to selling, general and administrative expenses.