Hundreds of people working for The Walt Disney company are out of jobs as of this week, according to reports that began rolling in Monday. What does this move indicate for the entertainment industry?
“This is very troubling and also very much a canary in a coal mine because of the traditional entertainment companies, Disney, NBCUniversal, Warner [Bros.], Paramount, you know, Disney is the one in the strongest financial position,” entertainment attorney Jonathan Handel told KNX News this week.
According to Deadline, most of the employees laid off by Disney this week are based in Los Angeles. The outlet said Disney’s Bob Iger set the pace for staff reductions when he returned as the company’s CEO by establishing a goal of at least $7.5 billion in cost reductions at the start of 2023. That year, around 7,000 jobs were eliminated.
Jonathan Serviss of the KNX’s “LA Local” podcast noted that this most recent round of layoffs is the forth at Disney in recent years. Most of the positions lost this time are in TV, marketing, publicity, casting and corporate finance.
“So, for Disney to be needing to lay off in this way is, you know, yet another signal along with data points such as the production in LA is down roughly 50% compared to its highs several years ago,” said Handel. “it is a very troubling, transitional, difficult time for the entertainment industry.”
Of course, Disney isn’t the only major media company that has cut positions during this challenging time. Handel said companies like NBC Universal and Paramount are still trying to restructure. Deadline noted that the Disney layoffs came on the heels of staff cuts at NBCUniversal as that company spins off several cable networks into a new company named Versant.
“Linear television broadcasts, such as ABC, owned by Disney, and cable are down, viewership is down dramatically and it’s aged out of the demographic that advertisers – the national advertisers – want to pay for,” he said. “Theatrical box office movie going is a little stronger this year than it’s been recently, but nowhere near what it was again, four or five years ago, pre-COVID, pre the Hollywood strikes.”
As companies like Disney, NBC and Paramount have moved to compete in the streaming sphere with companies like Netflix, more challenges have popped up.
“The stock market said: ‘Hey you’re spending all this, you’re coming spending all his money trying to compete with Netflix, building out streaming… we want to see profits. We don’t want… we’re not as interested in subscriber growth… show us the money.”
Still, Deadline reported that Disney had a better-than-expected Q2 earnings last month, “fueled largely by experiences and sports,” as well as some strong results from streaming. This spring, Iger also talked about creating new jobs at the company, “largely in Disney experiences, including theme parks,” the outlet said.
Even some high-level employees have been impacted by the Disney layoffs reported this week. Sources cited by Deadline said Eric Souliere, VP Casting for 20th Television, is leaving to work on casting on “9-1-1: Nashville” and Tony Tompson, VP Content Development at Hulu Originals is also leaving to pursue new opportunities.
“You’ve heard a lot of stories on this podcast about the very ill health of the entertainment industry and considering that I’m in a branch of that industry in the news medium, it brings me no joy to report on yet more creative and talented people losing their jobs,” said Serviss.