Disney to cut 7,000 jobs in Iger’s company ‘transformation’

Layoffs represent 3% of workforce as company reports earnings that beat expectations

The Magic Kingdom at Walt Disney World in Lake Buena Vista, Florida. AP

The Walt Disney Company on Wednesday said it would cut about 7,000 jobs as part of a “significant transformation” announced by chief executive Bob Iger.

The job cuts amount to about 3 per cent of the entertainment company’s global workforce and were announced after Disney reported quarterly results that topped Wall Street’s forecasts.

Mr Iger returned as chief executive in November after a challenging two-year tenure by his chosen successor, Bob Chapek.

The company says the job reductions are part of a targeted $5.5 billion saving across the company.

As of October 1, Disney employed 220,000 people, of which about 166,000 worked in the US and 54,000 internationally.

In its latest results, solid growth at Disney’s theme parks helped to offset tepid performance in its video streaming and movie business.

Disney said on Wednesday that it earned $1.28 billion, or 70 cents a share, in the three months to December 31.

That compares with net income of $1.1 billion, or 60 cents a share, a year earlier.

Excluding one-time items, Disney earned 99 cents a share. Analysts, on average, were expecting adjusted earnings of 78 cents a share, according to FactSet.

Revenue grew 8 per cent to $23.51 billion from $21.82 billion a year earlier. Analysts were expecting revenue of $23.44 billion.

Mr Iger said the company was embarking on a transformation that management believes will lead to improved profitability in its streaming business.

The company said Disney+ ended the quarter with 161.8 million subscribers, down 1 per cent from since October 1.

Hulu and ESPN+ each posted a 2 per cent increase in paid subscribers during the quarter.

Shares in Disney, which is based in Burbank, California, rose 3 per cent in after-hours trading.