On Wednesday, Walt Disney Company announced a major restructuring, laying off 7,000 employees in an effort to save $5.5 billion in costs and turn its streaming business profitable. The 7,000 job cuts represent approximately 3.6% of Disney’s total workforce. The restructuring, led by newly reinstated CEO Bob Iger, will result in a more cost-effective, coordinated approach to Disney’s operations as the company focuses on its core brands and franchises.

Disney’s restructuring is in response to slowing subscriber growth and increased competition for streaming viewers, as well as activist investor Nelson Peltz’s criticism that the company was overspending on streaming.

Disney will restructure into three segments under the new plan: an entertainment unit that includes film, television, and streaming, a sports-focused ESPN unit, and Disney parks, experiences, and products.

The entertainment division will be led by TV executive Dana Walden and film chief Alan Bergman, while ESPN will be led by Jimmy Pitaro. According to Reuters, this is Disney’s third restructuring in five years and a new chapter in Iger’s leadership, who took over as CEO in 2005. Iger, who will return to the role in November 2022, will now seek to put Disney’s streaming business on a path to growth and profitability while restoring decision-making authority to the company’s creative leaders.

The layoffs come amid a wave of layoffs in the technology and media industries. The year began with unprecedented mass layoffs at some of the world’s largest corporations. Google laid off 12,000 employees, while Amazon laid off 18,000 workers.

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