Bob Chapek, the CEO of Disney, predicts reducing its workforce after the company reviews its spending based on a leaked memo published by CNBC. In addition, there is a possibility that Disney will also freeze hiring and will only bring on new hires for critical, business-driving positions.
A Round of Layoffs is Coming?
Should the company push through with this, there is bound to be a round of layoffs. Disney won't be the first streaming company to do this, as HBO Max and Warner Bros. Television have had several layoffs this year. In addition, Netflix has also laid off many employees due to slower subscriber growth.
There are no details yet on the number of workers that may be affected should Disney reduce its staff. So far, the company will begin forming a cost structure taskforce that will go through its finances.
Not A Surprise
The possibility of layoffs had become possible following its earnings called earlier this week when CFO Christine McCarthy said the company was "actively evaluating our cost base currently, and we're looking for meaningful efficiencies."
In addition, it seems like the company has made efforts to reduce costs. Included in their most recent memo, Chapek tells employees to conduct business meetings virtually to cut down on travel expenses.
However, Chapek predicts that its services will start to become profitable by the end of 2024.
The Rising Number of Layoffs in the US
This is not the first time that we're seeing this. The rising number of layoffs in the US has also become a trend.
The reasons for this could be attributed to the upcoming recession, the trade tensions between China and the US, and the layoffs of the companies after losing the streaming race, including Disney.
With their vast network of assets, Disney could be in a good position to weather the storm. As for the company's future, we'll have to wait and see and see how far this will go.
What's Next?
With the recent memo from Disney, the staff will be affected soon. We're not sure yet of the exact number they will be laying off. If this happens, then it will likely take a toll on its operations, including its streaming services. With that said, we'll have to wait and see if this will push through.
Now that the move to lay off some of its workforces is normal, it's time to prepare for the worst. It seems like it's starting to happen more to the company, and this is a sign that many companies are having a hard time ahead.
Written by April Fowell
This article is owned by TechTimes
