Disney has announced plans to cut 4,000 staff members across the conglomerate as part of a wider cost-saving initiative aimed at reaching $5.5 billion in savings. Deadline has learned that the majority of staff laid off from the feature side of the business were mid-level and coordinator employees. Among the departments hit were Searchlight, general Disney marketing, PR, distribution, legal, and the 20th and Disney story departments. Although many executives have been affected, Deadline reports that the layoffs were not as extensive as the 20th Century Fox acquisition. In the story department, eight employees were cut, some of whom had joined from 20th Century Fox.
According to sources, those dismissed were given 60 days’ notice, but must continue to work for the duration of their employment, with one week of severance pay. The collective bargaining agreement and length of service will determine the severance pay for union employees. Disney aims to give those fired as much flexibility as possible during the 60-day period so they can search for other jobs.
Searchlight was one of the hardest-hit departments, with those affected being mostly from the legal, production, PR, and marketing teams. However, Pixar in Emeryville, California, has so far remained untouched. Following the merger with 20th Century Fox, Searchlight was largely unaffected, but the classic arthouse label swelled post-merger, with more than 100 staffers. This has now been reduced to pre-merger levels.
The layoffs come as part of Disney’s cost-cutting measures in response to the COVID-19 pandemic, which has severely impacted the entertainment industry. Disney previously announced plans to cut $2 billion in costs, which was increased to $3 billion in September 2020. The company has been hit hard by the pandemic, with theme park closures and production shutdowns affecting revenue. However, Disney has reported strong growth in its streaming services, with Disney+ surpassing 100 million subscribers earlier this year.
While the cuts are a difficult development for those affected, they reflect the ongoing changes and challenges faced by the entertainment industry. The pandemic has accelerated the shift towards streaming services, while theaters have struggled to remain open. Disney has been proactive in adapting to these changes, increasing its focus on streaming services and expanding its content offerings. However, these measures have also required significant cost-cutting, which has impacted staff across the business.
The future of the entertainment industry remains uncertain, with the pandemic continuing to impact production and revenue. However, Disney’s strong performance in streaming services and the success of franchises such as Marvel and Star Wars indicate that the company is well-positioned to weather the challenges ahead. The layoffs are a reminder of the difficult choices facing businesses in the current climate, but also of the resilience and adaptability required to succeed in an ever-changing landscape.