Disney Plans More Layoffs While Spending Billions On Share Buybacks

Disney’s top lawyer has warned employees that his department will become “a much smaller organization,” with some staff personally affected. Since Josh D’Amaro took over as CEO in March, Disney let go of roughly 1,000 workers in April and announced several hundred more cuts in July, including significant cuts at Pixar.

Disney’s latest quarterly profit was $2.64 billion.

In a September 18 memo reported by Deadline, chief legal and global affairs officer Horacio Gutierrez said Disney was reviewing how its legal and global affairs teams work. According to the report, options include automating tasks (Disney just appointed an AI executive as its first-ever company-wide chief technology officer), using outside providers, and outsourcing.

He told staff that the changes would involve “hard choices.” Deadline reports that a separate, broader round of Disney layoffs could begin as early as next week. The company has not disclosed how many jobs either round might eliminate or when the legal department’s cuts would take effect. It’s unclear whether the upcoming cuts will affect Disney’s animation business.

Disney’s current financial situation makes further cuts even harder to swallow. In its most recent quarter, the company reported $25.2 billion in revenue, up 7% from a year earlier, and $5.6 billion in combined operating income across its business segments, up 21%. Its entertainment segment alone generated $1.68 billion in operating income, up 64%. Those figures cover Disney’s third fiscal quarter, which ended June 27.

So where is the money going? Disney’s own filings provide at least part of the answer. During the first nine months of its fiscal year, the company spent $7.2 billion on share buybacks and $1.3 billion on dividends. It also invested $6.8 billion in parks, resorts, and other property. In August, Disney raised its share buyback target to at least $9 billion for the full fiscal year.

A buyback is when a company purchases its own shares, leaving fewer shares in circulation. That can increase the value of the shares investors still hold, while dividends pay shareholders directly. Neither payment benefits the company’s workers, most of whom aren’t shareholders and many of whom are at risk of job loss.

The above figures are companywide, and they don’t tell us what it would cost to avoid further cuts. They do show that Disney is choosing where to spend billions of dollars and who it’s looking out for. As more employees lose their jobs, Disney will send billions back to shareholders who have nothing to do with the company outside of quarterly earnings calls and whatever their shares are worth that day.