Bob Iger, CEO of Disney, during a CNBC interview, February 9, 2023.

Randy Shropshire | CNBC

Disney will begin layoffs this week, the first of three rounds before the start of the summer that result in about 7,000 job cuts, according to a memo sent by CEO Bob Iger.

The cuts are part of a broader effort to reduce corporate spending and boost free cash flow. Disney said last month that it plans to cut $5.5 billion in costs, including $3 billion in content spending.

“This week we began notifying employees whose jobs were impacted by the company’s workforce reduction,” Iger wrote in the memo, which was obtained by CNBC. “Leaders will pass the news directly to the first group of affected employees over the next four days. A second, larger round of notices will occur in April with staff cuts of several thousand, and we expect to begin the final round of notices before the start of summer to reach our goal of 7,000 jobs.” .

The layoffs were initially announced in February. The job cuts will be across companies, hitting Disney’s media and distribution division, Parks and Resorts, and ESPN.

Disney is following Warner Bros.’s lead. Discovery and other legacy media companies are cutting jobs and spending. Disney said its streaming business, led by Disney+, Hulu and ESPN+, will stop losing money in 2024. Shares of Disney are up about 8% this year after falling 44% last year.

“We made the difficult decision to reduce our total workforce by approximately 7,000 jobs as part of a strategic reorganization of the company, including the significant cost savings needed to create a more efficient, streamlined and streamlined approach to our business,” Egger wrote. . “For our employees who have not been affected, I want to acknowledge that there will undoubtedly be challenges ahead as we continue to build the structures and functions that will enable us to be successful going forward.”

Since returning as CEO, Iger has reorganized the company and has acknowledged he’s considering selling Hulu. Disney will host its annual shareholder meeting on April 3.

Read Egger’s full note:

Dear fellow employees,

As I shared with you in February, we made the difficult decision to reduce our total workforce by approximately 7,000 jobs as part of a strategic reorganization of the company, including significant cost saving measures needed to create a more effective, streamlined and streamlined approach to our work. Over the past several months, senior leaders have worked closely with HR to assess their operational needs, and I’d like to provide you with an update on these efforts.

We began this week notifying employees whose jobs were affected by the company’s workforce reduction. Leaders will break the news directly to the first group of affected employees over the next four days. A second, larger round of notices will occur in April with several thousand employee cuts, and we expect to begin the final round of notices before the start of summer to reach our goal of 7,000 jobs.

The hard reality of many colleagues and friends leaving Disney is not something we take lightly. This company is home to the most talented and dedicated employees in the world, and many of you bring a lifelong passion for Disney to your work here. This is part of what makes working at Disney so special. It also makes it more difficult to say goodbye to the wonderful people we care about. I would like to extend my sincere thanks and appreciation to each departing employee for your many contributions and dedication to this beloved company.

For our employees who have not been affected, I want to acknowledge that there will undoubtedly be challenges ahead as we continue to build the structures and functions that will enable us to be successful going forward. I ask for your continued understanding and cooperation during this time.

In challenging moments, we must always do what is required to ensure Disney continues to deliver exceptional entertainment to audiences and guests around the world – now, and long into the future. Please know that our HR partners and leaders are committed to creating a supportive and seamless process every step of the way.

I want to thank each and every one of you again for all of your many accomplishments here at The Walt Disney Company.

sincerely,

Bob