Disney Faces Consequences of Mass Layoffs 6 Months Later

Earlier this year, Disney announced that the company would undergo a mass restructuring, part of which included mass layoffs — around 7,000 of them.

Disney World

As the entertainment sector took the largest hit, more than 300 jobs in Beijing were cut. These jobs focused on Disney’s streaming services, and with lack of manpower, Disney is now facing the consequences of their $5.5 billion spending cuts.

Per the Wall Street Journal, some effects on Disney’s streaming platforms began to malfunction. The vast majority of these effects were ones that were based on the viewer’s history and profile, while on Hulu, users lost the ability to use the search function entirely.

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It took days for Disney to work out the issues, as the error messages were sent to Slack channels that were previously operated by the Beijing team, who was no longer part of the picture.

Cinderella Castle in Magic Kingdom

Job cuts could be a reasonable explanation to this, but Disney CEO Bob Iger was scheduled to meet Republican Representative Mike Gallagher, who serves as a congressional committee chairman focused on U.S. competition with China. Specifically, the company feared that these malfunctions were a result of something more malicious than job cuts and had more to do with data security.

Cinderella Castle

The Beijing team members that were laid off specialized in technology and Disney’s streaming services, so they had access to U.S. consumer data that raised some red flags within the Company.

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Now, Disney is reassuring stakeholders that the Beijing layoffs were due to overall spending cuts rather than data security threats.

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As China remains the second-largest global market for movie releases and home to one of Disney’s Parks, it’s safe to assume that China remains an important partner for Disney and Iger. We’ll continue to keep you updated with more on this topic, as well as Disney news as a whole! Make sure to follow along so that you’re always in the loop.