Disney: Feeling the Pain from Cord Cutting
Several layoffs are reportedly being planned at Disney.
According to Cord Cutters News, layoffs are expected to hit all of the company’s media divisions including ABC Studios; ABC Entertainment; Disney Channel; Disney XD; Freeform and Disney Junior.
As many as 200 layoffs are expected at the company.
Sources indicate that cord cutting is a major reason as to why Disney is struggling financially right now, and moving forward with its layoffs. The company’s shares, after all, have dipped by 7 percent in 2017. Consumers are abandoning their traditional cable packages in droves, and many experts believe this trend is only going to accelerate in the near future.
Verizon, for instance, which lost 18,000 Fios video customers in the third quarter alone, fears the worst about cord cutting.
“There’s nothing new here in terms of the trends we have been seeing over the past few years around whether it’s cord cutting or cord-nevers or whatever else,” Verizon chief financial officer Matt Ellis stated recently. “Two or three years ago, we really started speaking about the fact the traditional linear tv bundle is not long-term sustainable. … We are not surprised.”
The layoffs are a certainly a troubling sign for Disney, especially as they follow the recent staff reduction at ESPN this year. Disney, however, is taking an interesting approach to cord cutting moving forward.
Rather than throwing up the white flag against cord cutting, Disney is planning to embrace it by launching a streaming ESPN service next year. The company even has plans to launch a streaming movie service in the near future.
It will certainly be interesting to see how Disney’s streaming endeavors go. If successful, it will lend further credence to the belief that cable companies can benefit from both types of offerings.