Walt Disney Co announced a sweeping restructuring on Wednesday under newly reinstated CEO Bob Iger, cutting 7,000 jobs as part of a $5.5 billion cost-cutting effort to make its streaming business profitable.
The layoffs are estimated to represent 3.6% of Disney’s global workforce.
In after-hours trading, Disney shares rose 4.7% to $117.22.
The steps, which included a promise to reinstate a dividend for shareholders, addressed some of activist investor Nelson Peltz’s criticism that the Mouse House was overspending on streaming.
‘We are pleased that Disney is listening,’ said a spokesperson for Peltz’s Trian Group late Wednesday.
The company will restructure into three segments in order to cut costs and return power to creative executives: an entertainment unit that includes film, television, and streaming; a sports-focused ESPN unit; and Disney parks, experiences, and products.
‘This reorganisation will result in a more cost-effective and coordinated approach to our operations,’ Iger said during a conference call with analysts. ‘We are committed to operating efficiently, especially in this difficult environment.’
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