Walt Disney Co., which completed its $71 billion acquisition of 21st Century Fox’s entertainment assets on Wednesday, is expected to lay off thousands of employees to achieve a cost-cutting goal of some $2 billion, according to a published report.
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As part of the acquisition of Fox assets, Burbank, California-based Disney is taking on about 15,400 Fox employees, while Fox Corporation will keep about 7,000. To reach Disney’s promised target of $2 billion in cost savings by 2021 about 3,000 employees are expected to be laid off, the Los Angeles Times reported.
Some of those cuts are expected to take place in overlapping divisions like marketing, distribution and home entertainment. Although a small number of layoffs could start as soon as this week, the Times reported, citing anonymous sources, the bulk of the cuts will likely not occur for weeks, or even months.
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Some of those cuts are expected to take place in overlapping divisions like marketing, distribution and home entertainment. Although a small number of layoffs could start as soon as this week, the Times reported, citing anonymous sources, the bulk of the cuts will likely not occur for weeks, or even months.
Disney did not immediately respond to a request for comment.
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In a note to employees on Wednesday, Disney CEO Bob Iger wrote that after executives at both companies spent the year studying how to integrate the companies, there are still “challenges” ahead in doing so.
“I wish I could tell you that the hardest part is behind us; that closing the deal was the finish line, rather than just the next milestone,” he wrote, in a letter obtained by CNBC.
“Our integration process will be an evolution, with some businesses impacted more than others,” Iger added. “We’ve made many critical decisions already, but some areas still require further evaluation. We may not have answers to all of your questions at this moment, but we understand how vital information is, and we’re committed to moving as quickly as possible to provide clarity regarding how your role may be impacted.”
In the deal, Disney acquired Fox’s film and TV studios; majority ownership in video-streaming service Hulu; a stake in U.K. pay-TV company Sky; and cable networks FX and National Geographic. 21st Century Fox is the former parent company of FOX Business and Fox News
