Walt Disney is considering thousands of job cuts despite forecasting double-digit adjusted earnings growth, as chief executive Josh D’Amaro seeks more savings to fund its next expansion.
Bloomberg reported on November 2 that some managers have been asked to identify annual cost reductions of 20%, potentially including redundancies. Savings would partly fund programming, technology, theme parks and cruise ships.
The company, which employed about 231,000 people worldwide at the end of fiscal 2025, has not confirmed the number or timing of any layoffs.
The proposals highlight how Disney’s profitable businesses face pressure to finance growth while traditional television struggles.
Disney’s 20% savings target signals another overhaul
The cuts would affect some divisions more than others, Bloomberg reported. The 20% savings target applies to certain managers, not to Disney’s workforce.
D’Amaro, who succeeded Bob Iger in March, has been reviewing overlapping functions and seeking efficiencies across entertainment and corporate operations.
Disney is also reshaping its television business around streaming audiences as traditional networks lose viewers and advertising revenue.
The company cut roughly 1,000 jobs in April and several hundred more in September. Those reductions followed a 2023 restructuring under Iger that eliminated 7,000 positions and targeted $5.5 billion in savings.
The latest proposals are therefore an extension of an established strategy rather than an emergency response to a single disappointing quarter.
In their August shareholder letter, D’Amaro and finance chief Hugh Johnston promised to keep “reducing costs across the enterprise” to finance growth.
Precisely where the savings fall matters. Streamlining back-office functions could improve efficiency, whereas cutting specialist creative or technology teams could undermine future revenue.
Why stronger earnings have not stopped Disney cutting costs
Disney’s June-quarter revenue increased 7% to $25.2 billion, while total segment operating income rose 21% to about $5.6 billion.
Adjusted earnings climbed 28% to $2.06 a share, although reported earnings under standard accounting rules declined to $1.51 from $2.92.
Disney projected roughly 12% adjusted earnings growth for fiscal 2026, excluding an extra reporting week, and double-digit growth for fiscal 2027.
Those forecasts concern adjusted earnings per share, not revenue or guaranteed cash-flow growth.
Theme parks, cruises and streaming have supported profitability, but traditional television faces shrinking audiences and advertising pressure.
Streaming also requires spending on original shows, technology and retaining subscribers. Disney flagged softer streaming advertising and a weaker-than-expected film release in its August update.
Morningstar analyst Matthew Dolgin said in August that “cost discipline and operating leverage” could deliver average double-digit annual streaming profit growth for five to 10 years, even with moderate sales growth. He maintained a $125 fair-value estimate.
That helps explain why healthy earnings and layoffs can coexist, as management wants more profit from existing operations while redirecting money towards faster-growing businesses.
Where Disney plans to reinvest the savings
Disney intends to direct some savings into new content, technology, parks and cruises, Bloomberg reported. It is also integrating Hulu more closely with Disney+ to improve customer engagement and retention.
The company’s entertainment streaming margin approached 13% in the June quarter, providing a financial base for further investment.
Disney previously guided to roughly $9 billion in fiscal 2026 capital expenditure, much of it tied to its physical attractions.
Morgan Stanley cited three possible catalysts for Disney’s valuation: resilient parks demand, stronger franchise returns and “durable double-digit Disney+ revenue growth with expanding margins”, according to The Fly. The bank retained an Overweight rating and $125 target.
Those assessments preceded the latest layoff report. Cutting expenses is not risk-free: fewer creative staff or diminished guest services could hurt the franchises and experiences Disney depends on.
Disney reports full-year results on November 17, when investors may seek clarity on spending and margins.
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