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By Hugh Cameron
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The Walt Disney Company’s reported plans to slash its workforce hint at further upheaval for the entertainment industry and the wider American labor market.
A report this week from Bloomberg, citing anonymous sources familiar with the plans, said Disney has cut thousands of roles and has urged certain managers to trim 20 percent off their annual costs. CNBC later reported on these plans based on conversations with anonymous sources.
The reports say that the savings could derive from layoffs or other efficiencies, and that Josh D’Amaro, who assumed the CEO position in March, will be reinvesting these into programming and the company’s theme park and cruise-ship arms.
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Disney has not yet commented on the reports. Newsweek contacted the company on Tuesday for comment and is awaiting a response.
Why Is Disney Cutting Jobs?
"Disney’s recently announced layoffs are consistent with the broader contraction of film and television that we have been seeing as studio and streamers reduce their production slates," Dr. Kate Fortmueller told Newsweek. She is a professor of Film and Media History at Georgia State University and secretary of the Society for Cinema and Media Studies.
This "moment of contraction" is occurring in the wake of Hollywood’s "Peak TV" period from 2013 to 2022, Fortmueller said, and amid a decline in series production.
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"The news is bleak, as Disney has already had five sets of layoffs already this year," said Miranda Banks, professor at LMU's School of Film and Television and co-author of Boom to Bust: How Streaming Broke Hollywood Workers. However, Banks added that evidence suggested the reasons behind the layoffs were company-specific, rather than a reflection of pervasive trends in the wider labor market.
Disney delivered an earnings beat in its most recent results, released early August, with the CEO expressing confidence that the company is "uniquely well positioned." But Disney is also engaged in a long-running push for efficiency that began under former CEO Bob Iger, who outlined a target of $7.5 billion worth of savings in 2023. This plan has since resulted in major cuts across nearly every division alongside the elimination of thousands of positions.
"We remain highly focused on reducing costs across the enterprise to create incremental capacity to invest for growth and are evaluating a variety of levers, including reductions in labor and SG&A [Selling, General, and Administrative expenses]," executives said in early August.
Peter Capelli is George W. Taylor Professor of Management and director of the Center for Human Resources at the University of Pennsylvania’s Wharton School. He told Newsweek that the layoffs could be partially blamed on "pressure from the investor community." Capelli added that, as a new CEO, D’Amaro is "under more pressure than usual to show they are making progress"
What Disney Layoffs Say About the Future of Job
The Bloomberg and CNBC reports say the cuts coincide with weaker box office revenues and international theme park demand, growing competition from streaming, and pressure to embrace AI.
A Senate report last year found that 100 million American jobs could be at risk from automation and artificial intelligence. The latest monthly layoff estimates from the outplacement firm Challenger, Gray & Christmas suggested that AI is increasingly proving a major employment threat. As of September, it has been referenced in 120,136 job cut announcements, some 21 percent of all that have occurred this year, and remains the most-cited reason of 2026.
But experts are skeptical that the Disney example can be projected onto the wider jobs market. Banks told Newsweek these layoffs appear motivated by company-specific factors rather than those, like AI, that are often expected to reshape employment conditions in the U.S.
"Expectations of the future usefulness of AI are far outweighing the current reality of how AI is being used in Hollywood," Banks said. "These layoffs are tied to shareholder expectations, not a sudden usefulness of AI technologies.
"I would note that the list of explanations includes AI but, importantly, other much more standard pressures: increased competition and a slowdown in customer demand," added Paul Osterman, professor emeritus of human resources and management at the MIT Sloan School of Management.
"This is important because it illustrates that, while AI is on everyone’s mind, it is not the only driver of job market outcomes and that longstanding explanations remain important."
As in most industries, Capelli said he would doubt that the cuts could be directly attributed to the technology.
He pointed to a working paper from the National Bureau of Economic Research (NBER). It surveyed hundreds of CFOs and found that AI’s "near-term labor market effects are characterized less by aggregate job losses and more by shifts in tasks and occupational exposure across workers."
"Our central finding is that, in the near term, AI has not led—and is not expected to lead—to meaningful reductions in aggregate employment," the paper read.
Contact Newsweek editors on this story: Ben Kelly and James Debens
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