ESPN Prepares For Layoffs Next Week As Disney Adopts Cost-Cutting Measures

Cable sports channel ESPN is set to initiate layoffs early next week as part of Disney's ongoing cost-cutting measures, as quoted by CNBC.

The layoffs are expected to affect both on-air talent and management, although the exact number of job losses remains uncertain and the decision process is still subject to change.
ESPN has, however, declined to comment on the situation. Reports suggest that Disney is planning to eliminate a total of 7,000 jobs in three phases, with the second round of layoffs scheduled for next week. Additionally, Bloomberg has reported that the company intends to terminate around 15% of its entertainment division's workforce during the same period.

Disney's, led by CEO Bob Iger, recently made its first round of cuts, which included its metaverse strategies unit and a portion of its Beijing office. This move comes as Disney aims to improve its free cash flow, particularly in light of ongoing losses in its streaming division.

One area where cost considerations may come into play is in the renewal discussions with the National Basketball Association (NBA) by Disney-owned ESPN. In order to renew its contract with the NBA, ESPN may need to pay a significant premium of the $1.4 billion per year rights fee it currently pays to the league, as per CNBC.

This is just one example of how Disney is carefully evaluating its spending in various areas to achieve its goal of cutting $5.5 billion in costs this year, with $3 billion of that targeted at reducing content spending.

In 2020, ESPN underwent a significant workforce reduction, laying off approximately 300 employees. Earlier this year, Disney underwent a reorganization, and as part of this restructuring, ESPN will now report its financials as its own division, providing a more transparent view of its business operations.

Disney's upcoming earnings report on May 10 will likely shed more light on ESPN's financial performance.