Disney (DIS) CEO Bob Iger announced the start of the company's mass layoffs on Monday after the company last month outlined plans to cut 7,000 workers this year in an effort to slash $5.5 billion in costs.
"This week, we begin notifying employees whose positions are impacted by the company’s workforce reductions," Iger wrote in an internal memo obtained by Yahoo Finance. "Leaders will be communicating the news directly to the first group of impacted employees over the next four days. A second, larger round of notifications will happen in April with several thousand more staff reductions."
Iger, who said the final round of layoffs will take place before the beginning of the summer to reach the 7,000-job target, warned there will be "challenges ahead" for the employees still present at the company.
"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. I ask for your continued understanding and collaboration during this time," he wrote.
Disney stock was little changed on the heels of the news. Shares are up about 10% since the start of the year.
In addition to the layoffs announced in February, Disney also disclosed plans to restructure the organization into three core business segments: Disney Entertainment, ESPN, and Disney Parks, Experiences and Products.
"The difficult reality of many colleagues and friends leaving Disney is not something we take lightly," Iger stressed.
In his prepared remarks during the company's first quarter earnings report on Feb. 8, Iger said the new strategic organization "will result in a more cost-effective coordinated and streamlined approach to our operations, and we are committed to running our businesses more efficiently, especially in a challenging economic environment."
Alan Bergman and Dana Walden will be co-chairs of Disney Entertainment, which will include the company's full portfolio of entertainment media and content businesses globally, including streaming.
Jimmy Pitaro will continue to serve as chairman of ESPN, which will include ESPN Networks, ESPN+, and its international sports channels, while Josh D'Amaro will continue to be chairman of Disney Parks, Experiences and Products.
At the time, Iger underscored his commitment to creating a direct link between content decisions and financial performance. He said Disney+ is on track to achieve profitability by the end of fiscal 2024 after losses within the company's streaming division narrowed to $1.1 billion from $1.5 billion in its latest quarter.
Alexandra is a Senior Reporter at Yahoo Finance. Follow her on Twitter @alliecanal8193 and email her at [email protected]
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