The Disney CEO added that they are anticipating staff reductions as part of their review
Disney will slow down recruitment efforts as part of cost-cutting measures disclosed by CEO Bob Chapek to fellow top executives. According to separate reports from Variety and CNBC, Chapek said in a memo that the company is carrying out these "cost management efforts" to achieve profitability for Disney+ in fiscal year 2024 amid "economic uncertainty."
"We are limiting headcount additions through a targeted hiring freeze. Hiring for the small subset of the most critical, business-driving positions will continue, but all other roles are on hold," Chapek said in the memo quoted by Variety. "Your segment leaders and HR teams have more specific details on how this will apply to your teams."
The Disney CEO added that they are anticipating staff reductions as part of their review of their SG&A costs.
"As we work through this evaluation process, we will look at every avenue of operations and labor to find savings, and we do anticipate some staff reductions as part of this review," Chapek said.
In addition, the company is also limiting its business travel to "essential trips only," according to the CEO.
"In-person work sessions or offsites requiring travel will need advance approval and review from a member of your executive team (i.e., direct report of the segment chairman or corporate executive officer)," Chapek said in the memo also quoted by CNBC. "As much as possible, these meetings should be conducted virtually. Attendance at conferences and other external events will also be restricted and require approvals from a member of your executive team."
These decisions come as the company establishes a cost structure task force who will make the "critical big picture decisions," according to Chapek, who said they are also reviewing the company’s content and marketing spending.
"Our transformation is designed to ensure we thrive not just today, but well into the future—and you will hear more from our taskforce in the weeks and months ahead," Chapek said. "I am fully aware this will be a difficult process for many of you and your teams. We are going to have to make tough and uncomfortable decisions. But that is just what leadership requires, and I thank you in advance for stepping up during this important time."
Disney won't be the first company to make changes in their workforce, after social media giant Twitter under Elon Musk laid off several staff early this month. Meta, Facebook's parent company, also laid off 13% of its workforce and said it will extend its hiring freeze until the first quarter of 2023.
