Disney dropped some serious news bombs during its Q1 2023 earnings call.
Cinderella Castle
We learned the number of current Disney+ subscribers, how much Disney Parks have made, what three movies are getting sequels, and more. But we also learned about how the company wants to cut spending by $5.5 billion, as well as how it plans to do that.
To start, Disney plans on cutting a whopping $3 billion in non-sports content. Iger said, “We will take a very hard look at the cost of everything we make across television and film.” That could mean cutting content on Disney+, but it could also mean that the company could be considering selling its share of Hulu. According to Iger, “everything is on the table” right now, concerning the streaming service, which Disney owns two-thirds of.
©Hulu
The other $2.5 billion will be cut by general operating costs. CFO Christine McCarthy later said that the non-content cost-cutting will happen like this: 50% marketing and 20% in technology, procurement, and other expenses. However, 30% of those cut costs will happen in labor — the company also announced layoffs for 7,000 Disney employees.
Partners Statue in Disney World
The company has also immediately been restructured “aimed at returning greater authority to our creative leaders.” The company will be organized into three divisions: Disney Entertainment, ESPN, and Disney Parks, Experience, and Products.
©Alberto E. Rodriguez / Getty Images
Iger stated that the reorganization will provide “a more cost effective, coordinated and streamlined approach” to how the company operates, as well as “re-establish a direct link between content decisions and financial performance.”
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If Disney doesnt stop raising prices for park admission, hotels and food, then they will lose even more money. You can’t make up for a shortfall in the other areas by nickel and dimeing the park attendees. People will just stop going. I think a lot have.