Amid massive layoffs across the global tech sector, the U.S.-based media and entertainment behemoth The Walt Disney Company has announced to reduce 7,000 jobs as the company looks to cut costs and implement serious strategies to make its streaming business successful.

The decision to cut Disney's global overall workforce by 3.6% comes after new CEO Bob Iger joined the company in November 2022. It is Iger's second stint with Disney. He previously worked with the entertainment giant for about 15 years from 2005 to 2020. During his earlier tenure, the company acquired some of the major brands like Pixar Animation Studios, Marvel Entertainment and Lucasfilm.

Overall, Disney aims to save around $5.5 billion with these cost-cutting measures. The decision to trim the workforce in order to save costs is seen in a positive light by the investor community. Soon after the announcement, Disney's shares surged 4.7% to $117.22 in after-hours trading.

The cost-cutting measures will affect Disney's three segments -- film, television and streaming unit; sports unit comprising ESPN and its parks, experience and related products unit. The company has also decided to restore shareholder dividends, which will be increased over time, says the CEO. The current restructuring is Disney's third one in the past five years.

Earlier, the company announced its fiscal first-quarter results that ended on December 31, 2022. Its net profit surged 11% to $1.279 billion, while its revenue surged 8% YoY to $23.5 billion. Diluted earnings per share (EPS) from continuing operations for the quarter increased to $0.70 from $0.63 in the prior-year quarter.

“After a solid first quarter, we are embarking on a significant transformation, one that will maximise the potential of our world-class creative teams and our unparalleled brands and franchises,” said Iger. He said: “We believe the work we are doing to reshape our company around creativity while reducing expenses, will lead to sustained growth and profitability for our streaming business, better position us to weather future disruption and global economic challenges, and deliver value for our shareholders.”

The latest layoffs at Disney come amid major cost-cutting measures taken by all major companies, especially those in the tech sector. On February 6, PC manufacturer Dell Technologies said it’ll sack 6,650 employees or 5% of its global workforce to counter falling sales. Earlier, another PC giant HP announced 4,000-6,000 layoffs.

Microsoft has already said it’ll lay off 10,000 employees, or about of its global workforce by the third fiscal quarter of 2023, whereas Google will be slashing 6% of its total workforce or around 12,000 jobs globally. Amazon announced layoffs of over 18,000 workers, starting January 18, 2023. Companies like Meta and Twitter have also said they cut a significant proportion of their workforce to save rising costs amid tough global conditions.

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