Disney, an American multinational mass media and entertainment conglomerate, has announced plans to reduce its workforce by 6%, affecting approximately 200 employees across its ABC News Group and Disney Entertainment Networks units.
According to a Wall Street report, Disney is also shuttering 538, a data-driven political site that had about 15 staffers. It confirmed that the company is winding down the 538 brand and will offer polling and political data analysis under ABC News going forward. ABC will also merge digital and social operations, integrating digital editorial and social teams with news-gathering, shows, and owned stations.
This move by the media company, marks another wave of cost-cutting and restructuring measures, as it navigates industry shifts and the decline of traditional cable television.
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Key Divisions Impacted
Several major divisions within Disney are expected to be affected:
- ABC’s news magazine programs, 20/20 and Nightline, will merge into a single unit.
- The company will eliminate FiveThirtyEight, its political and data analysis website.
- Good Morning America’s production staff will also face job cuts.
- The Disney Entertainment Network division, which oversees channels like X, is expected to reduce staffing in its programming and scheduling operations.
This is not the first time Disney has laid off part of its workforce. Recall that in February 2023, the company laid off 7,000 employees, roughly 4% of its global workforce, as part of its restructuring plan. The layoffs followed Bob Iger’s return to the company after the board fired Bob Chapek as its leader.
Part of Disney’s layoffs comes as the company contends with a changing media landscape marked by several issues which include the declining influence of cable television, as viewers shift to streaming platforms. Several reports reveal that consumer behavior has shifted dramatically away from traditional cable TV.
Television viewership has continued to drop, as streaming services capture the attention of audiences, with Netflix alone reaching over 67 million North American subscribers by 2019.
These changes have created a devastating financial cycle. As viewers leave cable, advertisers have substantially reduced their broadcast and cable budgets while increasing digital spending tenfold. This revenue loss forces cable providers to cut costs by reducing channel offerings, creating a downward spiral.
Disney Shifts From Cable TV to Streaming
While Disney has a strong presence in cable TV, the industry shift toward streaming and digital content has led it to focus more on streaming services like Disney+ and Hulu. The company recognized that consumers increasingly prefer flexible, ad-free, and on-demand content over traditional TV broadcasts, leading to the launch of Disney+, expansions in Hulu, and a broader focus on digital entertainment.
For sports, Disney launched ESPN+, a standard streaming platform that offers exclusive live sports, documentaries, and pay-per-view UFC events.
Also, as the media company attempts to cut costs as it competes with other streaming services in delivering an array of content to users, it reported a 44% jump in adjusted per-share earnings of $1.76 for the October-December quarter of 2024, according to Reuters.
Financial Outlook and Future Projections
Despite these challenges, Disney’s latest earnings report exceeded projections, driven by cost-cutting measures and strong performances in its theme park division. However, the company has forecasted a “modest decline” in Disney + subscriptions for the second quarter.
The ongoing industry-wide shift has forced major media companies, including Disney, to rethink business models, with a greater focus on digital transformation and cost efficiency.