Layoffs looming at ABC as Disney aims to cut 10 percent of costs

CEO of the Walt Disney Company, Bob Iger.

Michael Kovac | Getty Images

CEO of the Walt Disney Company, Bob Iger.

Disney is usually attempting to cut 10 percent a year through its costs, a move of which may bring layoffs after a summer of bad box office numbers as well as struggling ratings.

The media giant is usually targeting the cuts in its ABC television group, a source familiar with the adjustments told CNBC. Disney has yet to finalize plans regarding staffing levels however the company is usually seeking to make reductions by attrition, the source said.

Disney is usually required to identify those cuts by the end of September.

Cuts are anticipated to take place throughout subdivisons of the ABC television group, according to The Wall Street Journal. Disney plans to make reductions at ABC’s broadcast network, news, television production studio as well as local stations.

Disney stock cost reflects the company’s recent lackluster performance, down 2 percent This specific year at $102 per share, after hitting a 52-week high of $115.84 on April 2, according to FactSet.

In conversations with CNBC, several high-level executives at large media companies have expressed frustration as well as anger with Disney CEO Bob Iger’s decision, announced on Aug. 8, to create two direct-to-consumer offerings.

Disney plans to remove its movies through the well-known streaming service Netflix beginning in 2019 as well as start its own. Next year, ESPN’s streaming service kicks off, with content through 10,000 sporting events.

Iger’s response to the criticism has been: “Any intellectual property company should be careful about being lulled into supporting a platform of which may not serve the customer effectively in a disrupted world.”

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