Disney Kicks Off Third Wave Of Layoffs That May Affect Over 2,500 Jobs: Report

Disney started a third wave of layoffs on Monday, and this round is expected to affect more than 2,500 employees across the company, a new report has revealed.

This week's layoffs do not specifically target any division, but television departments saw a "small" number of layoffs, sources told Deadline. Television was previously hit hard in the second round of cuts, the outlet noted.

Sources added that if the timeline of cuts that Disney CEO Bob Iger confirmed in late March were to go by, this week's reductions would be the last of huge layoffs for some time.

Moreover, the third round of layoffs brings the total number of job cuts to more than 6,500, which is close to the figure Iger previously announced, CNN reported.

On the other hand, smaller cuts may still take place in the coming months, sources said further.

Disney announced its plan in February to eliminate around 7,000 jobs as part of the efforts to save up to $5.5 billion in costs this year. The company was under mounting pressure from investors to turn a profit from its streaming business.

Disney's first wave of layoffs started on March 27. The entertainment giant said at the time that it needed to create a more "streamlined" business.

A person with knowledge of the matter revealed back then that a number of major units would be affected, including Disney Parks and Disney Entertainment.

Also hit by the first layoff wave was the Metaverse division, which had 50 employees. Sources told the Wall Street Journal that everyone at the said unit was laid off.

Iger previously praised Disney's Metaverse push, saying it was "the next great storytelling frontier."

The second wave of layoffs reportedly started on April 24. Disney officials said at the time that the company would have eliminated a total of 4,000 jobs during the second round of layoffs.

"The senior leadership teams have been working diligently to define our future organization, and our biggest priority has been getting this right, rather than getting it done fast," Disney co-chairmen Alan Bergman and Dana Walden wrote in a note to employees seen by CNBC.

The last known layoffs at Disney took place at the peak of the pandemic when the entertainment giant said it was looking to cut around 28,000 jobs at its parks and resorts arms.

The company increased the number of planned layoffs to 32,000 workers as the coronavirus crisis continued to hurt its business.

Meanwhile, Disney continues to cut costs across the board.

Last week, the company told CNBC that it was shutting down its immersive but pricey hotel, Star Wars: Galactic Starcruiser.

The two-day hotel experience costs around $1,200 per person daily, according to the outlet. Disney reportedly spent $2 billion in the construction of its two Star Wars parks, though it is unclear if the Starcruiser construction's costs were included in the estimated sum, according to the outlet.

"Star Wars: Galactic Starcruiser is one of our most creative projects ever and has been praised by our guests and recognized for setting a new bar for innovation and immersive entertainment," the company said in a statement.

The immersive hotel isn't the only arm hit by Disney's cost-cutting efforts.

The company is cutting more than two dozen shows from Disney+ and Hulu starting May 26, including "Big Shot," "Best in Dough," and "Willow, Y: The Last Man," Entertainment Weekly reported.

The shelving of shows is not unexpected, according to the outlet, as CFO Christine McCarthy already alluded to the matter in a recent post-earnings call.

McCarthy said the company was reviewing content to align "with strategic changes," and the review will result in the removal of "certain content from our streaming platforms."

Disney's layoffs come at a time when the entertainment industry has been affected by a wider tech reckoning.

Late last month, multiple outlets reported that Amazon was laying off about 100 employees from Amazon Studios and Prime Video, including at least two executives from the entertainment arms.

Also last month, BuzzFeed announced it was shutting down its news operation as part of cost-cutting measures. CEO Jonah Peretti said the company could "no longer continue to fund BuzzFeed News as a standalone organization."

Other entertainment and media companies that have implemented layoffs in the last two months are Insider and Fox News. Meanwhile, Vice Media filed for Chapter 11 bankruptcy as the digital media firm struggled with plummeting ad revenue.