Despite high profits: Disney is cutting about 7,000 jobs

Despite good business in the past quarter, entertainment giant Walt Disney is planning major staff cuts. About 7,000 jobs – about three percent of the global workforce – will be cut under a program that aims to reduce annual costs by $5.5 billion. Disney boss Bob Iger announced this on Wednesday evening. Investors allowed the share to rise about eight percent in aftermarket trading.

In view of “global economic challenges”, Iger announced a major restructuring of the group. Disney recently earned better than expected: in the three months to the end of December, profit increased by eleven percent on an annual basis to 1.3 billion dollars (1.2 billion euros). Sales grew 8 percent to $23.5 billion. Disney beat Wall Street pundits’ forecasts.

However, the group lost subscribers to its main streaming service Disney + after sharp price increases. At the end of the quarter, the video service that competes with Netflix had 161.8 million users worldwide – more than one percent less than three months earlier. Disney’s other streaming services, Hulu and ESPN+, made modest gains. In addition, the division’s loss of $1.1 billion was lower than feared. In the previous quarter, the minus was $1.5 billion. (sda/dpa)