Disney has axed hundreds of streaming employees in China as part of the company’s first wave of layoffs.
According to The Wall Street Journal, Disney has laid off more than 300 employees in the capital city of Beijing whose jobs involved Disney’s streaming service as part of the company’s forecasted $5.5 billion cost-cutting initiatives. The layoffs come as part of CEO Bob Iger’s plan to cut costs by slashing more than 7,000 jobs within The Walt Disney Company.
During Disney’s fiscal first quarter earnings call in February, CEO Bob Iger and CFO Christine McCarthy shared revenue numbers that surpassed even Wall Street analysts’ projections. But the impressive numbers weren’t enough to stave off the impending doom of a massive restructuring within The Walt Disney Company, as well as a huge cost-cutting initiative, chock-full of thousands of planned layoffs, aimed at saving the company $5.5 billion. To Iger, the need was so dire that the veteran CEO promised the changes would go into effect immediately. The President of Disney Parks, Experiences and Products Josh D’Amaro said the changes would be felt across the entire company, including at Walt Disney World and Disneyland Resort.
In mid-March, managers throughout The Walt Disney Company were instructed to list their most “redundant and disposable” employees, allowing higher-level execs to make determinations about which “useless” Cast Members would be the first to go in Disney’s massive windfall of layoffs.
Disney rolled out its first-ever streaming service in November 2019, and it was an immediate hit with fans. Since that time, the Company has made streaming the focal point of its entire business, operating its flagship service Disney+, as well as ESPN+, and Hulu in the United States and Disney+ Hotstar in Asian countries. Disney’s new business is the streaming business. The rollout has taken time, as Disney has systematically added more and more countries to its list of those with access to Disney+, but despite their best efforts, the Company has not yet been able to crack the Chinese market when it comes to streaming. In fact, Disney+ is not available in any capacity in mainland China, a move that The Wall Street Journal touts as “part of a broader effort by Beijing to preserve the market for its homegrown streaming services.”
As of December 31, 2022, Disney+ had nearly 162 million subscribers, Hulu boasted 48 million, and ESPN+ had slightly less than 25 million. But despite the uptick in paid subscriptions, no part of the Disney+ streaming suite has yet to turn a profit for the House of Mouse, and that’s after nearly 3 1/2 years in service. Quite the opposite has been true of Disney’s streaming business as The Walt Disney Company has taken a $10 billion bath with its streaming platform, according to financial disclosures. As of the time of this publication, Disney has made a huge commitment to achieving profitability in its streaming division by September 2024, which doesn’t leave any time for errors or shortcomings.
The layoffs in Beijing this week largely affected employees in the tech sector at Disney–those working on features like personalization, search, and customer identification for Disney+. In a statement, Disney said that the layoffs in China are “part of the company’s cost-cutting effort and global reorganization.”
The recent deterioration of relations between China and the United States has brought additional woes to the hopeful future of Disney+ and theatrical releases of Disney films in mainland China, as several titles have been turned away by officials in the Chinese Communist Party who make decisions on the distribution of films within the country. However, a major shift has taken place in the past several months as some releases like Black Panther: Wakanda Forever have been cleared for distribution in China.