Over the last few years, streaming services have risen in popularity due to the massive amount of content they offer, such as movies, on-demand shows, and live television, all contained on a single platform.
This shift in media has taken clients away from traditional cable television networks, signaling the potential extinction of this once incredibly lucrative business that now struggles to survive.
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Because Disney is an expert in multimedia, the company saw the huge potential and massive monetary gains that entering the streaming service industry could bring to its business and was quick to develop its own, launching Disney+ in 2019.
Disney’s entertainment business is the company’s highest source of revenue, reporting 9% growth compared to the year prior for the first quarter of fiscal 2025.
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However, its linear networks were the only sector in its entertainment business to generate negative revenue, declining by 7% compared to the same period last year. Content sales and licensing generated the most revenue, with a 34% increase.
Disney reveals multiple layoffs in its television sectors
On Wednesday, Disney (DIS) revealed it will lay off approximately 6% of its employees, representing under 200 jobs at ABC News and its Disney Entertainment Networks division, to reduce costs.
As part of this new workforce restructuring, the ABC News network’s shows ‘Nightline’ and ’20/20′ will have their teams consolidated, and the iconic three-hour-long morning news show ‘Good Morning America’ will now be run by the same producer. These budget cuts also mark the end of the network’s polling site, 538, which will be completely shut down, and the merging of all digital and social media operations teams.
Related: Disney loses streaming subscribers for a surprising reason
The layoffs at the Disney Entertainment Networks division will affect program planning and scheduling, especially the FX and Freeform teams.
Senior Vice President of Strategic Communications for Disney Entertainment Television Richard Horrmann claims that the company has made all efforts possible to minimize the number of jobs affected by the business restructuring as it evaluates “new ways to effectively manage resources and boost efficiencies.”
Disney shifts its business strategies to compete with streaming services
As shocking as these layoffs may seem, Disney employees had been expecting these job slashes since last September.
Last year, Disney announced it would be laying off multiple employees after a review of the corporate business structure had been performed to optimize the company.
Due to the constant evolution in the media industry, Disney has made multiple rounds of layoffs across various divisions over the last few years to better adapt its business based on current trends.
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Recently, Disney has made huge streaming investments, especially in obtaining live sports licensing deals for its ESPN banner, to compete with other streaming services amid growing competition.
This has caused Disney to shift its business strategies by focusing on its streaming services rather than its television channels and reorganizing budgets to further invest in this far more lucrative sector.
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