Disney+ Inc. Earned $23 Billion in the Quarter-Octary 2015 Results, and Disney Announced Job Cuts

The job cuts were announced by Iger after the company released better than expected financial results. Disney revenue in the quarter rose 8% to $23.5 billion, edging past estimates of $23.4 billion from analysts surveyed by Refinitiv.

Meeting goals requires all of us to continue doing our part to manage costs, despite certain macroeconomic factors that are out of our control, according to the memo.

Disney’s overall loss in the quarter was only slightly higher than in the same period a year ago but it was still down from the prior quarter’s $1 billion loss.

The company reaffirmed its guidance that Disney+ remains on course to be profitable in the next fiscal year, which runs from October through September 2024, although it cautioned that could be affected by an economic downturn.

The streaming service is known for original series including the “Star Wars” entries “The Mandalorian,” “Andor” and “Obi-Wan Kenobi,” the Marvel entries “WandaVision,” “Hawkeye” and “She-Hulk: Attorney at Law,” and content hubs for Disney, Pixar, Marvel and “Star Wars” films.

Corporate America is cutting the number of employees to prepare for an economic downturn. In order to reduce costs, Meta said this week it would cut over 11,000 jobs.

Warner Bros Discovery has undergone dramatic cost-cutting efforts, including layoffs as it restructures its content operations after being merged with Disney.

Disney has established a task force that will help him make critical big picture decisions.

The company will look at cutting spending on marketing and content, but the cuts won’t hurt quality. The company will be hiring a small number of critical positions and some staff reductions are planned as it tries to make itself more cost efficient.

The Tax-Free Disney Streaming Stream: A Breakdown in the Fourth Quarter of Disney’s $Renty Creek$ Regulation

So this week the Florida legislature is in special session to pass a new Disney-related law that makes clear that the entity will remain on the hook for the $1 billion in debt. But the government-like entity, which will have its named changed from Reedy Creek to “Central Florida Tourism Oversight District,” will now be kept alive but controlled by a board appointed by the governor, not Disney.

The company faces turmoil in the media industry, plunging cable subscriptions, a still-recovering box office, giant streaming losses, activist shareholders and labor disputes with employees. That’s a lot for CEO Bob Iger to handle.

The MoffettNathanson note said that Disney won’t be saved by just one person but by an honest and brave self-examination of what is working and what needs to be fixed.

Iger said that the company’s media and content businesses worldwide would be combined into a new segment called Disney Entertainment. He said the reorganization was an example of how creativity can return to the center of the company.

But that came at a cost of larger-than-expected losses of $1.5 billion for the quarter and $4 billion for the fiscal year that concluded October 1. The streaming business was on target to achieve profitability in Fiscal 2024, assuming there isn’t a significant shift in the economic climate.

Beyond the number of streaming subscribers Disney added in the period, investors will want to know how much it lost, any changes to target date for when it will be profitable, and how customers are responding to the new pricing options.

“Given a shift of attention from subscriber growth to profitability, most [streaming] services have moved into a price-raising mode,” wrote Doug Creutz, analyst for Cowen.

The number of subscribers was down only 1%, to 162 million from 164 million, at the end of the quarter that ended October 1. The number of subscribers for the businesses in which it has a stake, including Disney’s streaming businesses, rose 2%.

Wage Negotiation in Disney World: Lobby Support of a Wage Proposal from CEO Ben Iger and the Walt Disney Company

The Disney board reached a truce with Loeb, after he backed off on the proposal. Another activist investor, Nelson Peltz, is moving ahead with a proxy fight in an effort to win a spot on the Disney board, although he is silent on ESPN in his proposal to trim costs at the company.

Rief Ehlrich doubts that Iger will comment on the proposal if it comes up, unless it is dismissed out of hand.

Unionized rank-and-file workers at Disney World last week voted 96% against a contract offer from Disney that would have given them raises of at least $1 a year over the next five years.

The company and a group of six unions representing 32,000 union member are due to return to the negotiating table, and no strike deadline has been set. The unions are demanding an immediate raise of $3 a hour for members – a 20% raise – with $1 a hour raises to follow in subsequent years.

The unions want the current wage of about$15 an hour to live on in the area even for full time work. The company called the rejected wage proposal a “very strong offer.”

Revenue was up 36% and profits more than doubled from the previous fiscal year. And both revenue and operating profits are above what the company posted in fiscal year 2019, before the pandemic, with a 12% rise in revenue and a 10% gain in earnings.

Disney and the LGBT-Leading Initiatives: a First Year in Board Control of Disney and Implications for Non-Content Operations

It began last year when Florida passed the “Parental Rights in Education” law, which imposes restrictions on classroom instruction of sexual orientation and gender identity. Opponents dubbed the bill the “Don’t Say Gay” law and a group of Disney employees urged the company to use its clout as the state’s largest employer to oppose the legislation. Iger joined the calls while he was months away from returning to the CEO office.

But after the bill passed, and Gov. Desantis and Republican supporters of the legislation took aim at Disney, passing a subsequent bill to dissolve the government-like entity, known as the Reedy Creek Improvement District, which Disney has controlled and used to exercise its government-like powers. In June, this will take effect.

That legislation had its own problems, too, as towns and counties were afraid they could be left with about $1 billion in debt for which Reedy Creek had sold bonds to provide government services.

Disney had about 220,000 workers as of October 1, of which approximately 166,000 were employed in the United States. A cut of 7,000 jobs represents about 3% of its global workforce.

He said that they would like to have the board approve a dividend by the end of the year. The cost-cutting initiatives will be able to do this. It will be a modest dividend and we hope to build upon it over time.

The announcement of the job cuts come as a result of a cost-cutting effort. Iger said the company is aiming for $5.5 billion of cost savings across the company, with $2.5 billion of that coming from annual savings in “non-content” operations. Content operations refers to business units such as movies and television shows.

It said 50% of the cost savings would come from marketing expenses, 30% from labor savings and 20% of the cost savings would come from less spending on technology, procurement and other expenses. Disney, which is a major advertiser, has a $1 billion reduction in annual marketing expenditures that signals more trouble for other media and tech companies.

The box office showings, including for the hit movie, helped the results, as did the robust theme park revenue.

The Future of Streaming Business: What do we care about and how do we do it? A Brief Comment on “The Case of Black-box Production at HERA” by S.R.M. Toda

He said that the streaming business, which he believes is the future and has been growing, was not delivering the kind of profitability or bottom line results that the linear business delivered over a few decades.

He said that streaming “remains our #1 priority. We are going to remain faithful to the traditional platforms and still benefit from them, but we are not going to abandon them.

The company is fueled by creativity and story telling, he said. To make sure people who are in charge of the creative processes feel supported, is the best way to spur great creativity. Therefore, our new structure is aimed at returning greater authority to our creative leaders and making them accountable for how their content performs financially. That link was severed by the former structure.