Disney is cutting 6% of its news and entertainment division workforce, impacting nearly 200 employees, primarily at ABC News, which will also close its political and data-driven site, 538. The layoffs include consolidating production teams for shows like “20/20,” “Nightline,” and segments of “Good Morning America.” These reductions are part of a broader effort to improve efficiency amid declining traditional television revenue and increased competition from streaming. Disney has cut over 8,000 jobs in 2023 alone to save $7.5 billion annually as it navigates the challenges of a changing media landscape.
Disney (DIS) is reducing its workforce by 6%, translating to nearly 200 employees, within its news and entertainment division, as confirmed by Yahoo Finance on Wednesday.
Most of these reductions will affect ABC News, which will also be closing its political and data-oriented news site 538. Disney’s ESPN initially purchased 538 from Nate Silver in 2013 before moving it to the network division five years later.
According to reports from the Wall Street Journal and the newsletter Status, the layoffs will lead to a consolidation of production teams across “20/20” and “Nightline,” as well as the three hours of “Good Morning America’s” branded segments.
Following the announcement, Disney’s stock showed minimal reaction. Shares have declined by approximately 2% since the beginning of the year, underperforming relative to the broader S&P 500 (^GSPC).
As of 3:42:48 PM EST. Market Open.
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“In rethinking our working methods to safeguard our team’s future, we regretfully must let go of some of our exceptional staff,” stated Almin Karamehmedovic, president of ABC News, in an internal memo accessed by Yahoo Finance.
These layoffs occur as Disney strives to optimize operations amid a swift decline in traditional television. “The ABC News Group and Disney Entertainment Networks consistently explore innovative ways to efficiently manage resources and enhance effectiveness,” Karamehmedovic noted.
Since the start of 2023, Disney has cut over 8,000 positions to achieve an annual cost reduction of $7.5 billion.
Like other traditional media companies, Disney has invested significantly in high-cost streaming projects due to the widespread departure of pay TV subscribers.
In its most recent earnings report, Disney noted a 7% year-over-year drop in revenue from linear networks, and the operating income for that segment fell by 11%.
Historically, linear advertising and cable affiliate fees contributed substantially to revenue growth; however, with advertisers shifting to digital platforms and away from traditional TV, it appears that these revenue patterns may not return.
These challenges have led to numerous layoffs throughout the industry, as companies intensify their focus on streaming via newly introduced ad-supported tiers, bundled options, and increased prices.
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Nevertheless, Disney’s executives have consistently expressed their commitment to maintaining traditional television assets.
“Linear networks and streaming are essentially interconnected, as much of the content we produce ends up in both formats,” stated Disney CFO Hugh Johnston to Yahoo Finance last month.