Saturday, May 25, 2024

Economic Crisis: JPMorgan fires 100 of employees, Disney planning to cut 7,000 jobs


Los Angeles: After the hiring announcement, JPMorgan fires hundreds of mortgage employees while Disney is planning to cut 7,000 jobs across the company. Both companies will restructure their business to reduce costs and boost their profit.

JPMorgan has cut hundreds of mortgage employees, a source familiar with the matter told Reuters on Wednesday, hours after the company announced plans to hire some bankers.

“We regularly review our business and customer needs and adjust our staffing accordingly – creating new roles where we see the need or reducing positions when appropriate,” a Chase spokesperson told Reuters.

The Walt Disney Co. said Wednesday it will also cut about 7,000 jobs as part of a “significant transformation” announced by CEO Bob Iger.

The job cuts amount to about 3% of the media and entertainment’s global workforce and was announced after Disney reported quarterly results that topped Wall Street’s forecasts. The layoffs are part of a broader effort by Disney to lower costs by $5.5 billion.

Iger, who returned as CEO in November following a challenging two-year tenure by his handpicked successor, Bob Chapek, is under pressure to revive the company’s financial fortunes and its stock price, which has tumbled 24% in the last year.

Disney is struggling with costs for luring new subscribers to its streaming service, Disney+, amid heated competition from Netflix, HBO, and others. 

“In our zeal to go after subscribers, we got too aggressive in our promotions,” Iger said on a conference call to discuss the company’s first-quarter results, which were released on Wednesday. 

Iger said the company wants to “lean more into our core franchises and our brands” while also reducing costs “on everything we make.”

Disney faces pressure from Nelson Peltz, a billionaire investor who is seeking to join its board of directors as part of a proxy fight against the company. Disney has urged shareholders to vote against Peltz, CEO of Trian Partners, according to Reuters. The proxy vote is set for April 3.

Shares of Disney jumped 5.6% in after-hours trading.

“The company unveiled a new structure, with the big difference being that ESPN is now going to be operated as a separate entity (although Iger says a spinoff of ESPN isn’t being planned),” Wall Street analyst Adam Crisafulli of Vital Knowledge said in a research note.

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