The Walt Disney Company’s last quarter wasn’t as profitable as some investors expected, and stock value for Disney dropped dramatically during their quarterly earnings call. But what effect does that have on the company itself?
With major losses in streaming, Disney is looking at cost-cutting options to keep profits up, and it looks like they might have just decided on one major way to save some money.
CNBC obtained an internal memo that Disney CEO Bob Chapek sent out to division leaders on Friday, November 11th. In the memo, Chapek announced that Disney will “institute a targeted hiring freeze.” The timing of this decision seems to correlate with the release of last quarter’s disappointing results.
Chapek said, “We are limiting headcount additions through a targeted hiring freeze. Hiring for the small subset of the most critical, business-driving positions will continue, but all other roles are on hold.” He also mentioned that job cuts could be part of this change: “We do anticipate some staff reductions as part of this review.” Other major media companies (like Netflix) have been experiencing layoffs recently.
During Disney’s last earnings call, CFO Christine McCarthy said that Disney is “actively evaluating our cost base currently, and we’re looking for meaningful efficiencies.” Those changes are meant to “provide some near-term savings” as well as “drive longer-term structural benefits.”
Although Disney+ has continued to gain more subscribers, the streaming service (combined with Hulu and ESPN+) lost $1.47 billion last quarter. Disney executives expect the losses to lessen next year, and they’ve predicted that Disney+ will “become profitable by the end of 2024.”
We’ll keep an eye out for updates about this situation and let you know about any news, so stay tuned to DFB.
Peg Sapinski says
Disney is no longer a well run company. Chapek and McCarthy are responsible for the decline of Disney. Yes the economy has something to do with the decline in numbers but so much has been taken away from not only DVC members but people who book reservations on Disney property that people are realizing that it may no longer be worth it to visit the Disney parks. Although the parks made money in the 4th quarter revenue was down according to an article I read. This probably means that cuts will be made at the parks once the Christmas season is over. The parks are already understaffed and the Park Reservation in may opinion will hurt Disney in the long run. Why does Chapek continue to build hotels and DVC properties when he is so worried about the capacity in the parks. In the 23 years as a DVC member I have never had an issue in the past in getting into the parks excluding New Year’s and the Christmas week. Spring break is also a busy time but if you know what the park capacity is turn people away if the park is overcrowded and they can go to a different park without waiting until 2pm. I purposely avoid holiday periods to avoid crowds. I hope Chapek falls on his face and McCarthy with him.
AlanC says
Could the Bob years be taking their toll?
Pat says
Disney has already lost so
much of the magic that was associated with it. Hoping that this business model doesn’t send it into complete failure. Our last family trip last November (11 of us) was quite a disappointment. Sad.
Cyndi says
This seems very short-sighted to me. As i understand it, they never did get all the staff back from pre covid at the parks and it really shows from my previous visits. The customer experience has really suffered and if they continue to layoff or not hire adequately in the parks, it’s going to be a huge long term problem. Maybe Chapek should consider not paying himself over 100 million a year and focus on what works. Also, the parks are what is doing the best within the disney brand so i hope cuts in other places or not at all. Of course this guy thinks the answer is layoffs, ugh…he is awful.
Blake Pace says
The loss of $1.47 Billion is more than the last reported loss. The trend is toward greater losses, not lesser.
S.Luke says
So the reason they’ve been giving for lack of openings of entertainment, restaurants and other pre-covid stuff is lack of employees, but now they are freezing and/or cutting employees. So I guess they have no intention of returning to the precovid experience even though they are charging way more. Very sad!
Rob says
They didn’t “lose” $1.57 billion….. they just didn’t MEET their EXPECTATIONS they posted in their reports. I’m so sick of these companies artificially inflating their value based on pure speculation. Ridiculous.
Carol Tricarico says
They should lower the salaries of the undeserving people who run the company and freeze their salaries. Disney hasn’t lost, what BS!! Price increases across the board constantly and no more free extras, who are tg hey kidding.
Bob says
All they would have to do is not take or cut their millions of dollars in bonuses and they could avoid the layoffs. Their greed makes me sick
Joe H says
Layoffs should start with the CEO)
Ray says
Once again pay more for less.
Luis Martinez says
Recall the executive’s bonus and stop giving them. That way you don’t have to freeze hiring at lower levels or lay off. People aren’t going to go to these parks or resorts at high prices with low service standards.
Dr John Buono says
Has no one noticed the problem is chapek. His Disney + losing 2.47 billion in one quarter is why profits down. So his solution is to fire cast members.
He has got to go. He is destroying Disney!!!
Dr John Buono says
That should be 1.47 billion
Ronjon says
Yet Bob and his Excutive Minions will still be getting raises and higher bonus’s.
Gayle says
If WDW would FIRE Chapek, that would save them a ton. Bring back the magic and they will come in droves. But of course you don’t listen to smart people you listen to people like Chapek who is taking Disney down the wrong path and everybody can see it except for whoever is running the company whoever hired him in the first place. Whoever hired Chapek Is the one responsible get rid of the dude he’s doing nothing but flushing Disney World down the toilet!
Jane says
I’ve noticed that neither Chapek or McCarthy are willing to take a pay cut to maximize profits just axe the cast members & gouge the public. Way to go Chapek. Keep reaming everyone!
Ron says
Disney earned $7.4 Billion in the fourth quarter in the parks because the customers are spending 40 Percent more in the parks. NO SURPRISE
1. NO FREE FAST PASS
2. $15-22 for Genie Plus Per Customer Each Day
3. $11-22 For Lightening Lane Per Person
Great Job Disney, your customers are spending 40 Percent more in the parks by the press of a Disney Button and you still have to lay workers off.
Disney Revenue in the fourth quarter is down from the Third Quarter in 2022. No Surprise. Wait for Disney Revenue in 2023 to drop like a rock for a couple of reasons.
1. In 2022 the REVENGE VACATIONERS Will complete their last visit to Disney and the Disney Vacation Club Members will use up their points or lose them. When Disney sees the slowdown in hotel room bookings for 2023, then and only then will they offer reasonable room discounts and maybe just maybe consider the return of the Free Fast Pass.
Disney, you are not the only company that lost profit during the Pandemic, but you are the only greedy company that made it back and then some in two years. A million people lost their lives, their jobs, their homes, their savings and their retirement during the Pandemic. NEVER TO GET IT BACK, BUT NOT YOU DISNEY. Give them and all of us a break. Roll back some of your selfish policy changes over the last two years. Disney, do something for your customers PLEASE
al says
So they will fire staff at the parks while wasting more funds on the streaming and sports. Smart?
Jeffrey says
How about putting a freeze on all executive bonuses? That way people who need jobs, won’t be affected. I mean Bob does get tens of millions of dollars and perks as a bonus. I don’t know, personally cuts should be made at the top, but then again Bob is very greedy, and as much as he says he cares about cast members, he doesn’t.
Mike says
You think Disney’s customer service at the hotels and parks has gone downhill??? Wait until they make things worse with the staff reductions. Get ready for even worse customer service at an even higher cost.
chewiespal says
Freezing the bonuses of the higher ups would help a bit.
Didn’t see that mentioned.
Joanne says
Just Fire Bob Chapek
Rob says
I hope it is only for the corporate personal, as the parks still seem to be understaffed.
Mike Betz says
ummm they dont have enough staff to serve customers….with record profits……
pattie says
Disney needs to stop the bonus NOW and give raises to cast members and hire more cast members with better wages and they r the ones that should get bonus not chapek and McCarthy and the others how do they sleep at night they have no regard for others
Chrystie says
I don’t know that they said Disney WORLD Cast Members would be the ones getting laid off. Just Disney Cast Members. All their employees are called Cast Members. The quote was “We do anticipate some staff reductions as part of this review.” There are a lot of people working for Disney so don’t just assume it will be the Cast Members at Disney World losing their jobs. It could be an accountant or an imagineer. Any layoff sucks, but y’all always assume everything is about Disney World. Disney is a huge company.
Carole says
I just came back from a 1 week trip to Disney world where I stayed with a friend. I was stunned to see the parking so empty and the park was sold out but there was not a crushing mess in the park. I’m not surprised that profits are down as the amount of people let in is so minimal. As well, it was so complicated to book and do rides that I really thought ling and hard what I wanted to do. I’m lucky enough to have annual pass that will expire December 31st . I will not be renewing my pass as it’s just so complicated. Instead of traumatizing cast members, it would be better to rethink this new business model
Laurel Lane says
Get rid of Chapek and the entire Board who back him and you’d save tons of money. Bring back what used to be free perks and get rid of Genie, Lightning Lanes and Park Reservations and more people would be inclined to come which equals more money. But you have to get rid of Chapek and the Board first; they are the reason for all the unhappy guests.
pattie says
Disney has made it so difficult to go and have fun experience that we don’t plan on going vacation at Disney is suppose to b a very relaxed experience and not B cell phones to plan the day and mobile orders and have plan the day out so early when trying to get ready for the day and then hope to make it to the attraction and keep a reservation to eat my husband has a walking disability and has to use a scooter and then use a travel walker to get n to rest rooms and n to Reasturant and then we r suppose to keep on schedule this is so heartless what Bob chapek has done and then to stop the Disney express that could have helped with luggage and get my husband on the bus I think they had a lift with a wheel chair to get him on and off and for anyone that thinks that when people have special things that have to do to get around disney and that people like my husband and others r n their way well there’s one word and it’s called KARMA and we all know I’m saying we saw people at the parks b 4 my husband had these difficult problems with his legs and have always RESPECTED those with problems and knew they had the RIGHT to b there that last films we are at Disney we were n line for soaring and young women was there with her mom and hade to use a scooter to get around n the parks and her mom said there was people that said MEAN things that they were n their ways and this young women was getting ready to have her SECOND BRAIN SURGERY what a heartsless way to treat people and when it comes to my husband I’ll VERY PROTECTIVE so people need to not b so hateful