Disney confirmed that it will cut jobs in yesterday’s Q1 earnings call as sequels to Toy Story, Frozen and Zootopia were also announced.
Returning Disney chief executive Bob Iger has moved swiftly to address the company’s financial challenges, announcing that the entertainment giant will be cutting 7,000 jobs in a major shake-up. The job cuts are part of a plan to save $5.5b and make Disney+ profitable. The streaming service has reported its first fall in subscribers since its launch in 2019.
Commenting on the job cuts, Bob Iger claimed that he didn’t take the decision lightly: “I have enormous respect and appreciation for the talent and dedication of our employees worldwide, and I’m mindful of the personal impact of these changes,” he said. However, he stated that the changes would “better position us to weather future disruption and global economic challenges.”
The 7,000 job cuts are equivalent to approximately 3.6% of Disney’s workforce around the world and are believed to be part of a wider series of cost-cutting measures, including travel restrictions.
The overall financial results were actually better than many analysts had predicted. Disney reported an 8% rise in sales to $23.5b (£19.4b) between October and December last year. Profit also rose by 11% to $1.3b. However, Disney+ reported a $1.5b loss and its subscribers fell by around 2.4m to 161.8m.
During the earnings call, Bob Iger also announced that animated sequels to Toy Story, Frozen and Zootopia are in the works, stating: “We’ll have more to share about these productions soon, but this is a great example of how we’re leaning into our unrivalled brands and franchises.”
On the positive side, the most recent instalments of those animated franchises were huge global grossing hits at the box office: Frozen 2 ($1.45b in 2019), Pixar’s Toy Story 4 ($1.07b in 2019) and Zootopia ($1.02b in 2016). However, cinemas are still recovering from the pandemic, with few recent movies matching pre-pandemic numbers. Not all observers are impressed by the strategy of relying on sequels rather than original content. Commenting on the story on Deadline, one poster said: “Pixar used to stand for quality. It’s turned into a sequel conveyor belt, which is depressing. I’m not saying they should never make sequels, but Toy Story 4 is a perfect example of running out of creative steam.”
Indeed, licensees and retailers will have to evaluate the likely appetite from consumers for merchandise based on these franchises. Zootopia was a fine movie, but was responsible for negligible merchandise sales on its release in 2016. Earlier Toy Story movies were phenomenally successful, but the fourth movie was widely considered a creative and commercial misstep, with many feeling the series should have finished after the perfect conclusion of the story arc at the end of the third movie. The failure of last year’s Lightyear spin off won’t have helped.
Frozen arguably remains the most intriguing of the reboots: while Frozen II didn’t match the merchandise success of the original movie, it still provided licensees and retailers with respectable sales, and the ongoing success of the stage show illustrates that the property remains extremely popular within its target demographic.