The Walt Disney Company plans to freeze hiring and cut some staff to keep its Disney+ streaming service profitable during times of economic uncertainty, according to a Reuters memo on Friday.In a memo to Disney’s business unit heads, CEO Bob Chapek said the company is implementing a targeted hiring freeze and will be closing “some small businesses” to control costs. He said he expects a significant reduction in personnel.
Certain macroeconomic factors are beyond our control, but achieving these goals requires that we all continue to do our part to control what we can control, especially costs. should continue to play a role,” Chapek wrote in a note.The move comes after Disney underperformed Wall Street’s quarterly earnings estimates on Tuesday. The entertainment giant has lost even more from its foray into streaming video. The company’s shares fell more than 13% on Wednesday following the results.We are fully aware that this will be a difficult process for many of you and your teams,” Chapek wrote. “We will have to make difficult and uncomfortable decisions, but that is what leadership is called for and we thank you for your help during this critical time.”The move comes days after Disney reported disappointing quarterly results. The company’s shares plunged Wednesday to a 52-week low before rebounding later in the week.
The company already has begun looking at content and marketing spending, but Chapek said the cuts would not sacrifice quality. Hiring will be limited to a small subset of critical positions, and some staff reductions are anticipated, as the company looks to make itself more cost-efficient, Chapek wrote.Chapek said business travel would be limited and trips would require advance approval, or conducted virtually as much as possible. “Our transformation is designed to ensure we thrive not just today, but well into the future,” Chapek wrote.