(Reuters) -Walt Disney Co is planning to freeze hiring and cut some jobs, as it strives to move the Disney+ streaming service to profitability amid a period of economic uncertainty, according to a memo seen by Reuters on Friday.
Chief Executive Bob Chapek sent the memo to Disney's division leaders, saying the company is instituting a targeted hiring freeze and anticipates "some small staff reductions" as it looks to manage costs.
"While certain macroeconomic factors are out of our control, meeting these goals requires all of us to continue doing our part to manage the things we can control -- most notably, our costs," wrote in the memo.
The move comes after Disney missed Wall Street estimates for quarterly earnings on Tuesday as the entertainment giant racked up more losses from its push into streaming video, which it refers to as its direct-to-consumer (DTC) business. Shares of the company fell more than 13% on Wednesday following its results.
Wall Street analysts voiced concern about Disney's escalating streaming costs, with MoffettNathanson analyst Michael Nathanson observing, in a note earlier this week, "the company has to prove that their pivot to DTC will be worth the investment price that is currently being paid."
Corporate America is making deep cuts to its employee base to brace for an economic downturn. Meta Platforms said earlier this week it would cut more than 11,000 jobs, or 13% of its workforce to rein in costs.
Chapek said the company has established a task force, with Chief Financial Officer Christine McCarthy and General Counsel Horacio Gutierrez, to help him make "critical big picture decisions."
The company already has begun looking at content and marketing spending, but Chapek said the cuts would not sacrifice quality.
Hiring will be limited to a small subset of critical positions, and some staff reductions are anticipated, as the company looks to make itself more cost-efficient, he wrote.
Chapek said business travel would be limited and trips would require advance approval, or conducted virtually, as much as possible.
"Our transformation is designed to ensure we thrive not just today, but well into the future," Chapek wrote.
(Reporting by Chavi Mehta in Bengaluru; Editing by Anil D'Silva and Aurora Ellis)