Disney begins layoffs with goal of cutting 7K

Walt Disney Co. has begun the first of what is expected to be 7,000 job cuts, a key part of a $5.5 billion savings drive the company announced in February.

The first group of employees will be notified over the next four days, Chief Executive Officer Bob Iger said in a memo to staff Monday. A second, larger round will happen in April, impacting several thousand workers. The last of the affected workers will receive notice before summer.

Iger, who in November rejoined the company he led for 15 years, has laid out plans to improve the financial performance of the world's largest entertainment company. Among his challenges is wringing profit from the company's streaming TV businesses, which lost more than $1 billion in the quarter that ended in December.

Under Iger, the company is doing away with an organizational structure that put distribution executives over the company's TV and movie businesses. He has given more power to creative leaders such as Dana Walden, who heads the TV business, and Alan Bergman, who runs the film studios.

The cuts are expected to fall on all parts of the company, including theme parks and the ESPN sports networks. Disney employed about 220,000 people worldwide as of Oct. 1. Approximately 25% are part-time or seasonal employees.

“For our employees who aren't impacted, I want to acknowledge that there will no doubt be challenges ahead as we continue building the structures and functions that will enable us to be successful moving forward,” Iger said in the memo.

Iger said in February about $3 billion of the targeted cost savings would come from its budget for films and TV shows, and the rest from reductions in operating costs. About $1 billion of the savings effort was already underway, he said at the time. has launched investigations into managers' conduct in the Silicon Valley Bank and Signature Bank failures.

“It is worth noting that these two institutions were allowed to fail,” Martin Gruenberg, chairman of the Federal Deposit Insurance Corp., told a Senate hearing last week. “Shareholders lost their investment. Unsecured creditors took losses. The boards and the most senior executives were removed.”

The FDIC stepped in and took control of the two lenders this month as depositors yanked out their money.

Gruenberg said the FDIC can probe and hold accountable the directors, officers, professional service providers and “other institution-affiliated parties” for losses tied to the banks, as well as any misconduct in the management of the banks.

“The FDIC has already commenced these investigations,” he said.