The Walt Disney Company has begun laying off 7,000 employees, a move that was announced earlier this year.
The layoffs are part of a plan by Disney Chief Executive Bob Iger to make the company more “streamlined,” Reuters reported.
Disney’s entertainment, parks and corporate divisions, as well as its experiences and products group, will all be impacted. Only ESPN will not see layoffs in this round but is expected to see cuts later this year.
This week’s layoffs are just the first part of a three-phase elimination of thousands of jobs. Managers will notify the first group of employees who are affected this week. A second round, which will be larger than the first, will happen sometime in April and a third will happen “before the beginning of the summer” all in an effort to slash billions of dollars from the company’s budget, CNN reported.
CNBC said Disney needs to cut $5.5 billion in costs, including $3 billion in spending on content.
The company’s Metaverse division had been given the job of using Disney’s intellectual property and finding new, interactive ways to tell the stories through the use of technology.
There were about 50 members of the team that had been headed by Mike White, a former Disney consumer-products executive. The team was dissolved this week, with the members all laid off except for White, who will remain with the company, but in a role that has not been announced, The Wall Street Journal reported.
The Metaverse division was created by former Disney CEO Bob Chapek, who said in the announcement for the group’s creation, that its goal was to “create an entirely new paradigm for how audiences experience and engage with our stories.”
Chapek was fired by Disney and replaced by his predecessor Iger in November, the newspaper reported.
The cuts also come days after Walt Disney World and the union that represents 45,000 theme park workers reached a tentative agreement that will raise the minimum hourly rate for theme park employees to at least $18, an increase of between $5.50 and $8.60, WFTV reported.
Some employees will see wages as high as $24.60 depending on their position.
As of Oct. 1, Disney had about 220,000 workers worldwide with about 166,000 in the U.S. The cuts represent about 3% of its workers.