Disney CEO Bob Iger announced cost-cutting measures that would result in the layoff of 7,000 employees after the company’s streaming customers decreased for the first time since the service’s introduction in 2020.
The corporate restructure is part of Iger’s aim to save US$5.5 billion (£4.5 billion) during the company’s fiscal first-quarter results call.
It is predicted that the layoffs would affect 3.6% of Disney’s global workforce.
During the conference, it was revealed that Disney’s net income was $1.28 billion, which was lower than analyst projections of $1.43 billion, according to the BBC.
Disney Plus lost 2.4 million users in three months, at the same time when the price of monthly advertisement-free subscriptions was hiked from $7.99 (£6.61) to $10.99 (£9.10) in December.
Subscriptions fell from 164.2 million to 161.8 million between October and December.
‘The streaming business, which I believe is the future and has been growing, is not delivering the kind of profitability or bottom-line results that the linear business delivered for us over all over a few decades,’ Iger said.
‘And so we’re in a very interesting transition period, but one, I think, is inevitably heading towards streaming.’
He also warned investors that the losses may be due to a “global arms race for subscribers” by the corporation.
He said that the reduction in numbers was due to Disney’s “zeal to go after subscribers,” rather than charging consumers more.
‘I think we became a little too pushy in terms of promotion,’ he continued.
At the same time as the changes were announced, Iger confirmed that the Toy Story and Frozen series will receive more sequels.
He informed investors that the corporation was “pushing towards unrivalled brands,” and he emphasised the necessity of maintaining franchises.
While no further information was provided about the movie, four Toy Story films have been released since the first in 1995.
Lightyear, a spin-off, was also launched last year.
Meanwhile, Frozen and its sequel, Frozen 2, both grossed more than $1 billion (£820,000) at the box office when they were released in 2013 and 2019.
Following the success of Zootopia in 2016, Iger stated that a sequel was in the works.
The last time the firm made layoffs was at the end of 2020, when it announced the layoff of 32,000 theme park employees.
Iger joined Disney as CEO in 2005 and oversaw the acquisitions of Pixar, Marvel, and Lucasfilm, as well as the introduction of Disney Plus in 2019.
While he left his position the following year, he returned in November of last year.