Yahoo Finance entertainment reporter Allie Canal breaks down Disney CEO Bob Iger's latest memo to Disney staff outlining imminent job cuts in the first half of 2023.

Video Transcript

- We got to start with the latest developments out of Disney. CEO Bob Iger announcing the start of mass layoffs this week. The company is cutting a total of 7,000 workers as it looks to $5 and 1/2 billion in costs. Yahoo Finance's Alexandra Canal following this story for us. And Ali, what do we know about this first round of layoffs?

ALEXANDRA CANAL: So we already knew that these layoffs were coming. This was announced when Disney announced earnings on February 8, which is why I don't think we saw an immediate reaction to the stock price. But shares are moving a bit higher right now, up about 2%. Now, we did receive an internal memo from Bob Iger. Yahoo Finance obtained that. And we know that there will be three rounds to these cuts.

The first round happening this week, the week of March 27. Second round will be in April. And the third round will be before the beginning of the summer. So by the summer, 7,000 jobs will be eliminated. Now, Iger did warn that for the employees still present at the company, well, there are going to be a lot of challenges ahead.

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He wrote in part, quote, "for our employees who aren't impacted, I want to acknowledge that there will no doubt be challenges ahead as we continue building the structure and functions that will enable us to be successful moving forward. I ask for your continued understanding and collaboration during this time." So a turbulent period overall for this company.

And let's not forget in addition to these layoffs, Disney also restructured the business into three separate units. Entertainment. ESPN. Parks. So when Disney does report earnings next quarter, we will see all three of those segments split. And we will be receiving the details when it comes to revenue subscribers, which I do think analysts and investors alike are really curious about, especially with ESPN and how sports rights has just ballooned.

- Yeah. I couldn't agree with that more. I really want to get a glimpse, being a sports fan, of just how much they are contributing to the bottom line there. Obviously, parks we know is. But ESPN needs to be separated to get a better look under the hood. And I can tell you, everyone over at ESPN walking on eggshells, just wondering who's going to be next. It's a very tough time because they've been through this before. The whole media sector really is going through a tumultuous time, to use your words. Who else is undergoing a similar transition? And what does it tell us about the year ahead?