Disney plans thousands of layoffs as costs rise

Disney is planning to cut several thousand jobs and has asked some managers to reduce costs by up to 20%, people familiar with the matter told CNBC.

The layoffs are the latest round since CEO Josh D’Amaro took the reins earlier this year. The company cut as many as 1,000 employees in April, predominantly in marketing, and about 300 in September, many in human resources and technology. Bloomberg was first to report the new round.

Disney had about 231,000 employees as of the close of its fiscal year 2025, which ended in September. The company will report its fiscal fourth-quarter earnings on Nov. 17, where investors will be looking for details on the scope and timeline of the cuts.

The cost-cutting campaign

D’Amaro and CFO Hugh Johnston signaled the cuts in an Aug. 5 letter to shareholders. “We remain highly focused on reducing costs across the enterprise to create incremental capacity to invest for growth and are evaluating a variety of levers,” they wrote. “We are mid-stream in this work and will provide future updates on our progress.”

The language is corporate, but the direction is clear. Disney is in the middle of a multiyear cost reduction, and the layoffs are not a one-time event. They are a rolling program that will continue into next year. Chief People Officer Sonia Coleman told employees in August that “involuntary staff reductions have already begun in some areas and will continue into next year,” alongside an early retirement program the company introduced.

The 20% cost reduction target for some managers is aggressive. It forces middle management to make hard choices about programs, headcount and vendor relationships, and it pushes the decision-making down from the executive level to the people closest to the work. That can produce better cuts, or it can produce cuts that damage capabilities the company needs. The execution will determine which.

The industry context

Disney is not the only entertainment company reducing headcount. Netflix said in October it would lay off roughly 6% of its workforce. Skydance, the newly combined company of Paramount and Warner Bros. Discovery, is expected to cut staff to realize $6 billion in synergies over three years.

The pattern across the industry is the same. Streaming economics have not delivered the margins that media companies expected. Subscriber growth has slowed, content costs have risen, and the advertising revenue that was supposed to supplement subscription income has been slower to materialize than projected. Every major entertainment company is now in a cost-cutting cycle, and the layoffs are the visible part of that work.

Disney’s case is complicated by the size of the company. With 231,000 employees, Disney is not just a streaming business. It has theme parks, a movie studio, television networks, a consumer products division and a games business. The cost-cutting has to happen across all of them, and the areas that grow revenue are not always the areas that employ the most people.

What I think

The layoffs are necessary but the 20% cost reduction target is the part that deserves scrutiny. Asking managers to cut 20% of their budgets is a blunt instrument. It works if the managers know what to cut and have the authority to cut it. It fails if the cuts fall on the wrong things because the manager is trying to hit a number rather than make a strategic decision. Disney’s leadership will be judged on whether the company emerges from this cycle leaner and more competitive, or just smaller.

The timing relative to earnings on Nov. 17 is not accidental. Disney is giving investors a preview of the cost-cutting before the earnings call, where D’Amaro and Johnston will face questions about margins, streaming losses and the trajectory of the business. The layoff announcement sets up the earnings call to focus on the cost savings rather than the revenue challenges. That is the standard corporate playbook: control the narrative by leading with the action you are taking, not the problem you are solving.

The industry-wide nature of the cuts is the bigger story. Netflix, Skydance and Disney are all cutting at the same time, which means the problem is not company-specific. The streaming business model is under pressure, and the cost structure that was built during the growth phase is too heavy for the current revenue trajectory. The companies that come out of this cycle with the right cost structure will be the ones that survive the consolidation that is already underway.

Disney’s theme parks are the counterweight. The parks generate cash flow that funds the streaming and studio businesses, and they are not easily cut. A layoff at a theme park damages the guest experience, which damages revenue, which defeats the purpose. The cuts will fall on the corporate, technology and content sides of the business, and the parks will be protected. That is the right instinct, but it limits how much Disney can actually reduce costs, because the parks employ a large share of the 231,000 people on the payroll.

The entertainment industry is in a moment where the growth story has ended and the efficiency story has begun. Disney’s layoffs are one data point in a broad restructuring, and the Nov. 17 earnings call will show whether the cost cuts are big enough to satisfy investors who have been waiting for streaming to turn profitable. The media business is learning what every maturing industry learns: the growth phase is fun, and the efficiency phase is not.