LONDON (Brand Republic) - The Walt Disney Company is to cut its global workforce by 4,000, or 3%, in response to the softening US economy and the resulting weakening in advertising revenues.
In a memo to staff, the motion picture and entertainment behemoth said redundancies would be voluntary at first, although they would be forced if not enough staff accepted the company鈥檚 severance package.
The cuts follow Disney鈥檚 decision last year to close its online operation Go.com, with the loss of 400 jobs, having spent around $150m (£105m) developing the sites. Go.com has since been spared but is running in a much-reduced capacity.
This time, Disney expects to save between $350m (£245m) and $400m (£278) a year following redundancies. It will incur a one-time charge of $250m (£174m), mostly in the second half of the year, and it expects to meet financial targets this year, excluding the charge.
The news was welcomed on Wall Street as analysts said the company was reacting better to the slowdown in advertising revenues than it did when there was an economic downturn in 1991.
Disney shares improved by 4.58% yesterday at $29.20 (£20.43) on the New York Stock Exchange.
Disney owns the ABC and ESPN TV networks, a motion picture studio and a number of theme parks around the world.