“Hiring for the small subset of the most critical, business-driving positions will continue, but all other roles are on hold,” CEO Bob Chapek wrote in an internal memo to Disney executives, obtained by CNBC. “Your segment leaders and HR teams have more specific details on how this will apply to your teams.”
To further the cost-cutting initiative, Chapek said he established a cost structure taskforce consisting of himself, CFO Christine McCarthy and Horacio Gutierrez, Disney’s chief legal officer.
The taskforce will work with the company’s segment teams to “achieve both savings and organizational enhancements.” Aside from the hiring freeze and some staff reductions, Disney is limiting business travel to essential trips and curbing in-person work sessions, with Chapek saying meetings should be conducted virtually “as much as possible.”
“While we will not sacrifice quality or the strength of our unrivaled synergy machine, we must ensure our investments are both efficient and come with tangible benefits to both audiences and the company,” Chapek wrote.
The news came only a few days after Disney reported direct-to-consumer losses of nearly $1.5 billion in the fourth quarter. The losses were attributed to a higher loss from investment in Disney+ and decrease at Hulu.
Disney in its earnings report also expressed plans to realign costs associated with marketing as well as optimize its content slate and distribution approach.
But Disney in August stated it will be taking an “intentionally limited approach” to the ad-supported tier, meaning Disney+ programming will have lower ad loads than Hulu, for example.
Disney is far from the first media company to undertake restructuring costs. Earlier this year, Netflix laid off roughly 450 employees following first quarter losses. Warner Bros. Discovery, which recently cut 100 ad sales employees, disclosed in October it expects to incur up to $4.3 billion in post-merger restructuring costs.