Walt Disney is targeting $5.5 billion in cost savings, including $3 billion in non-sports related content, CEO Bob Iger said today on a meaty call after earnings where he detailed a company-wide restructuring.
He said the other $2.5 billion are general operating costs, of which $1 billion is already underway. The rest in incremental and will fully materialize by the end of fiscal 2024.
Disney is the latest conglom to wield the axe on content from giant Warner Bros. Discovery one down as challenges mount for streaming, advertising and stock prices. Rampant spending on new content for streaming has not been matched by the sector’s financial results or path to profits. That said, Disney’s DTC losses narrowed last quarter.
Warner Bros. Discovery CEO David Zaslav has promised investors $3.5 billion in cost cuts.
CFO Christine McCarthy speaking later on the call said the non-content SG&A costs are 50% marketing, 30% labor and 20% technology, procurement and other expenses. One billion was included in guidance last quarter that 2023 segment operating income should grow in the high, single-digit percentage range.
This year, it will book savings in distribution, marketing and headcount at DMED, the shuttered Disney Media and Entertainent Distribution division. The rest of the savings will materialize by 2024.
Disney said today it’s laying off 7,000 staffers.
McCarthy didn’t break down the savings on produced and licensed content spend, but said Disney expects to realize the $3 billion in annualized savings over the next several years.
The company said it’s committed to running its business “more efficiently to enhance profitability.”
Must Read Stories
Subscribe to Deadline Breaking News Alerts and keep your inbox happy.