Disney Rallies Investor Confidence with Price Hikes and Cost Cuts
Walt Disney Company (DIS) CEO Bob Iger took steps to reassure investors about the company’s streaming business on Thursday, raising prices for its Disney+ service and announcing plans to cut costs.
The price hikes, which will take effect in the U.S. on September 27, come as Disney faces increasing competition from rivals like Netflix (NFLX) and Amazon (AMZN). The company’s streaming services, including Disney+, Hulu, and ESPN+, have collectively lost subscribers in recent quarters.
Iger said the price hikes were necessary to fund Disney’s investments in original content and to make its streaming services more competitive. He also said the company was confident that its streaming business would be profitable in the long term.
In addition to the price hikes, Iger announced that Disney would be laying off 32,000 employees, or about 6% of its workforce. The layoffs are part of a $1 billion cost-cutting initiative.
Iger said the layoffs were necessary to make Disney more efficient and to position the company for long-term growth. He also said that the company would be investing in new businesses, such as its streaming services, and that it would be hiring in those areas.
The price hikes and layoffs are a sign that Disney is serious about its streaming business. The company is confident that its streaming services will be successful, but it is also taking steps to reduce costs and become more efficient.
The moves were welcomed by investors, who sent Disney shares up more than 5% in after-hours trading. The stock is up more than 30% this year.
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