Layoffs Hit Disney Entertainment Ahead of Q3 Earnings

Today, Disney laid off 140 members of its Disney Entertainment Television workforce. That represents roughly 2% of the division’s headcount, according to a person familiar with the matter.

National Geographic was particularly hard hit as that team will be reduced by approximately 13%.

A representative for the company declined to comment.

The layoffs represent an ongoing effort from the company to right-size its entertainment division as it contends with a dramatically reshaping media landscape. Disney, like other media companies, is in the midst of an ongoing transition as streaming continues overtaking linear TV.

The layoffs come ahead of the company’s third-quarter earnings call next Wednesday, in which the company expects to see softness in its streaming business, according to public filings. 

To bolster the division, the company has struck two bundling agreements. In February, it struck a joint sports venture called Venu alongside Fox and WBD. Later in May, it revealed a new bundle with Warner Bros. Discovery.

Its streaming services turned a profit for the first time in Q2 and are expected to reach profitability again in Q4. 

More recently, the reductions come on the heels of several wins for the company. 

Disney released Inside Out 2 in June, which generated over $1.5 billion at the box office. Last weekend, it premiered Deadpool & Wolverine, which became the first R-rated movie to gross over $200 million in its opening weekend.

Disney also secured one of three rights packages with the NBA last week, for which it will pay an average of $2.62 billion a year for the next 11 years. NBC and Amazon also secured rights deals.

Disney chief executive Bob Iger has faced challenges from activist investors Nelson Petz and Ike Perlmutter, whose efforts he successfully fended off. In late July, Perlmutter sold his stake in Disney for $2.9 billion.