Disney announced the financial results for the last quarter of 2022, and they are not good, at least by the standards of the leaders of the house of Mickey. As a result, the company will lay off just over 3% of its employees.
Like many of the big American companies, Disney has had a difficult year in 2022. Its streaming service Disney+ has lost nearly 2.4 million subscribers in one quarter and now only has 161.8 million. Such a figure would satisfy most video-on-demand services such as Salto, which is currently living its last hours, but the entertainment giant has far greater ambitions.
Bob Iger, CEO of the company, wants Disney + to have more than 245 million subscribers by 2024. To attract new customers, however, he does not intend to spend more money. The objective is, on the contrary, to save a little more than €5 billion. This involves a sharp reduction in the production of original content (announced as of December 2022), and a restructuring that leads to the dismissal of 7,000 employees.
Disney restructures its organization and separates several thousand employees
This restructuring was somewhat predictable. All the big names in technology, including Google, Meta and even Microsoft, are cutting off a large part of their workforce. Although Disney+ continues to bring in new subscribers, the fight between SVOD services is costly and ultimately pays too little. The company’s net income in the last quarter of 2022 was $1.28 billion, below the projections of its analysts.
Mr. Iger believes that the subscriber losses of Disney+ could be attributed to the fact that Disney “as a company is in a global arms race. In our zeal to attract subscribers, we have become too aggressive in terms of promotion “. According to him, the increase in tariffs had a minimal impact on the number of subscriptions, which means that the “quite aggressive” strategy of low prices “was not absolutely necessary”. We can therefore expect that in the near future, the prices of Disney+ will be revised… upwards.
Source: NeoWin