The Walt Disney Company is continuing its aggressive cost-cutting measures, laying off approximately 200 employees across ABC News, Freeform, and FX. These cuts, which primarily affect its news and television divisions, mark the latest in a series of job reductions as Disney works to streamline operations and focus on its streaming and direct-to-consumer (DTC) businesses. 

ABC News saw the bulk of the cuts, impacting about 6% of its workforce, including staff at ABC News Studios and programming such as 20/20 and Nightline. Additionally, Disney is shutting down FiveThirtyEight, the data-driven news site it previously acquired, citing the need to consolidate resources.

These layoffs follow a broader trend of workforce reductions across Disney since 2023. Last year, the company slashed thousands of jobs in an effort to reduce costs by $5.5 billion, with key layoffs affecting ESPN, Disney Parks, and corporate roles. Most recently, in September 2024, Disney eliminated 300 corporate positions, including legal and technology teams.

The restructuring efforts come amid CEO Bob Iger’s push to make Disney’s streaming services profitable. Despite steady growth in Disney+ and Hulu subscribers, the company faces mounting pressure to cut losses in its DTC business while navigating increased content costs, subscriber churn, and shifting consumer habits.

INSIDER TAKE

Disney’s layoffs signal a subscription-centric future. While job cuts are always disruptive, this latest round is particularly telling for the future of Disney’s subscription business. Here’s why:

1. Reallocating Resources for Streaming Profitability
   Disney+ has been a growth driver, but it has yet to become the profit engine Disney envisioned. The company has been restructuring operations to reduce expenses while increasing subscription revenue. Cutting back on traditional TV and news operations suggests a strategic shift in investment priorities toward streaming. 
   
   
2. Linear TV’s Decline and Subscription’s Rise
   With more viewers moving to streaming, Disney is scaling back on cable networks and legacy operations that aren’t directly tied to its subscription ecosystem. The layoffs at Freeform and FX hint at a reduced focus on linear content, which may lead to more exclusive streaming content on Disney+ and Hulu. 
   
   
3. The Cost of Subscription Growth
   Disney has implemented multiple price hikes for Disney+ and Hulu while simultaneously cutting costs elsewhere. Combined with its upcoming password-sharing crackdown, these moves indicate an urgent effort to maximize revenue per subscriber.
   
   
4. The Future of ESPN as a Streaming-Only Service
   ESPN, a major part of Disney’s subscription strategy, is set to go fully direct-to-consumer by 2025. The company is already restructuring its sports business, forming a joint streaming venture with Warner Bros. Discovery and Fox. More cost-cutting could be ahead as Disney prioritizes its subscription-first sports model.

Disney’s layoffs aren’t just about cost-cutting—they reflect a strategic recalibration toward a subscription-driven future. As the company optimizes for streaming, its focus is clear: profitability, operational efficiency, and maximizing subscriber value. The question now is whether these moves will be enough to secure Disney’s long-term success in an increasingly competitive DTC landscape.