Disney CEO Bob Iger has confirmed that the company will begin its first of three rounds of layoffs this week. The media conglomerate is looking to reduce its workforce by approximately 7,000 employees, Deadline is reporting.

The executive sent a memo to Disney’s employees today, in which he confirmed that the company is moving forward with the three rounds of cutbacks. This week’s initial round comes a few days before the conglomerate’s annual shareholder meeting, which is scheduled to be held next Monday, April 3. The upcoming second round is expected to have the highest number of layoffs.

Iger first announced plans for Disney’s downsizing last month. He noted that the layoffs will serve as a key figure in helping the company save $5.5 billion. Managers have been finalizing details of the new structure since the CEO’s initial announcement.

“In tough moments, we must always do what is required to ensure Disney can continue delivering exceptional entertainment to audiences and guests around the world – now, and long into the future,” the CEO wrote in the memo.

Iger returned to the conglomerate’s top job last November, after stepping down in 2020 following a 14-year stint. He has faced more challenges since returning to the position, including a more adverse macroeconomic climate and far greater Wall Street skepticism about the economics of streaming.

The executive has set up three corporate divisions – Parks, Experiences and Products; Entertainment; and ESPN – all of which will be part of the layoffs. The Entertainment division should see significant cuts on the business and content sides at Hulu as well as sister studios ABC Signature and 20th Television.

Disney’s restructuring comes as the company evaluates a number of strategic options. While Iger has maintained that ESPN is likely to stay in the corporate fold, it may offer a stand-alone streaming version in the near future.

The CEO has also indicated all scenarios are being considered for Hulu, which Disney operates but doesn’t fully own. Comcast’s 33% financial stake can be bought out by Disney early next year, or Disney could decide to sell its shares in the streaming operation. An exit seems possible given the executive’s less-than-enthusiastic commentary lately about the prospects for general-entertainment streaming.

The reduction in staff may help Disney’s stock, at least in the short term. As with many media stocks over the past year, Disney shares have lost about half their value since summer 2021. While the stock surged after Iger returned to the company, it has mostly been stable in recent months, and haven’t received any significant gains.

It’s not immediately clear what impact the cuts this week will have on Disney’s corporate structure, or which divisions will be impacted. Bu the three rounds of layoffs are expected to involve essentially every division of the conglomerate.

Read Iger’s memo to his fellow Disney employees below.

Dear Fellow Employees,

As I shared with you in February, we have made the difficult decision to reduce our overall workforce by approximately 7,000 jobs as part of a strategic realignment of the company, including important cost-saving measures necessary for creating a more effective, coordinated and streamlined approach to our business. Over the past few months, senior leaders have been working closely with HR to assess their operational needs, and I want to give you an update on those efforts.

This week, we begin notifying employees whose positions are impacted by the company’s workforce reductions. 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, and we expect to commence the final round of notifications before the beginning of the summer to reach our 7,000-job target.

The difficult reality of many colleagues and friends leaving Disney is not something we take lightly. This company is home to the most talented and dedicated employees in the world, and so many of you bring a lifelong passion for Disney to your work here. That’s part of what makes working at Disney so special. It also makes it all the more difficult to say goodbye to wonderful people we care about. I want to offer my sincere thanks and appreciation to every departing employee for your numerous contributions and your devotion to this beloved 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.

In tough moments, we must always do what is required to ensure Disney can continue delivering exceptional entertainment to audiences and guests around the world – now, and long into the future. Please know that our HR partners and leaders are committed to creating a supportive and smooth process every step of the way.

I want to thank each of you again for all your many achievements here at The Walt Disney Company.

Sincerely,

Bob

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