A walt disney co announced on Wednesday a sweeping restructuring under recently reinstated CEO Bob Iger, cutting 7,000 jobs as part of an effort to save $5.5 billion in costs and make its streaming business profitable.
The layoffs represent about 3.6% of the global workforce of disney.
To the actions from Disney rose 4.7% to $117.22 in after-hours trade.
The measures, including a promise to reinstate a dividend for shareholders, addressed some of investor Nelson Peltz’s criticism that the Mouse House was overspending on streaming.
Iger acknowledged on Wednesday that Disney may have been too aggressive in its zeal to acquire online video customers as traditional TV declined.
Under a plan to cut costs and devolve power to creative executives, the company will restructure into three segments: an entertainment unit that encompasses film, television and streaming; an ESPN unit focused on sports; and Disney parks, experiences and products.
“This reorganization will result in a more cost-effective and coordinated approach to our operations,” Iger told analysts on a conference call.
“We are committed to operating efficiently, especially in a challenging environment.”
Iger said streaming remains Disney’s top priority.
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