The economic slowdown in the world continues to impact the technology and entertainment sector and layoff announcements on Meta and Twitter, Disney confirmed a hiring and firing freeze at the companyafter presenting results that disappointed investors.
“We are going to limit employee additions through a targeted staffing freeze,” The Walt Disney Company CEO Bob Chapek announced in an internal memo to employees released by the Bloomberg news agency.
As part of the measures, employees will only be able to take business trips in essential cases and will seek to increase “efficiency” in areas such as marketing.
The cut comes just days after the entertainment giant announced a disappointing balance sheet.with two of its main businesses -streaming and theme parks- below the expected quarterly goals.
In the case of Disney+ -Disney’s flagship platform- losses doubled in the last quarter to US$1.47 billion, due to increases in programming production costs and expenses for expansion to new countries.
Disney shares have lost almost everything they gained during the Coronavirus pandemic: they are down 39% so far this year.
Although the quarterly goals for new subscribers were higher than estimated and even higher than those of competitors such as Netflix (235 million subscribers against 223 million), Disney expects that only by 2024 its streaming platforms – which include Hulu and ESPN + in the United States and Star + in Latin America – will generate profits.
“We have to ensure that our investments are efficient and bring tangible benefits to both audiences and the company,” Chapek added.
The CEO anticipated that “some staff reductions” and decisions that will be “difficult” will be made.
Disney shares lost almost everything they gained during the Coronavirus pandemic, falling 39% so far this year.
But not only Disney is affected: the streaming sector worldwide suffers from market saturation, the reduction in purchasing power due to the economic slowdown and the pressure from investors for companies to present profits.
Both Disney and Netflix recently announced increases in the value of their services as well as the launch of lower-cost, ad-supported packages.
Not only Disney is affected: the streaming sector worldwide suffers from market saturation, reduction in purchasing power due to the economic slowdown and pressure from investors.
So far this year, Netflix has made two rounds of layoffs for 450 employees due to stagnant growth, while Warner Bros. Discovery (owner of HBO Max) cut its payroll by 100 employees, canceled several series and movies from its platform and plans more layoffs at his movie studio.
Following WarnerMedia’s merger with Discovery in April, the company’s market value fell by nearly half.
In the case of Meta, the parent company of Facebook, Instagram and WhatsApp, it announced the dismissal of 11,000 employees, 13% of its plant.
