Disney's Biggest Round of Layoffs Expected This Week"I do not make this decision lightly," said Disney CEO Bob Iger.

Update:

A second round of Disney layoffs (and reportedly the largest) is set to begin this week, with several thousand staffers expected to be laid off Monday through Thursday. The cuts will affect employees "from coast to coast,"Disney said.

A memoseen by CNNfrom Disney CEO Bob Iger outlined how the layoffs, which will affect 7,000 roles, will occur in three separate rounds. The cuts this week are expected to impact ESPN, Disney Parks, and other departments.

The final of the three waves is expected this summer.

Original story below:

The mouse is about to clean house.

That was the message heard loud and clear atDisneyCEOBob Iger'sfirst earnings report since he came out of retirement to head up the global entertainment company.

In a bombshell call with analysts, Iger announced a sweeping corporate restructuring that will result in nearly 7,000layoffsto save $5.5 billion in costs. The job cuts make up roughly 3.6% of Disney's global workforce.

"While this is necessary to address the challenges we're facing today, I do not make this decision lightly," said Iger. "I have enormous respect and appreciation for the talent and dedication of our employees worldwide, and I'm mindful of the personal impact of these changes."

Related:Bob Iger Returns as Disney CEO and Bob Chapek Steps Down, Effective Immediately

A course correction comes at a cost

The House of Mouse is the latest U.S. company to initiate major job cuts, following in the footsteps ofGoogle,Amazon, Facebook, andZoom.

Iger said Disney wants to reanimate its film and TV business while cutting costs in "non-content" operations, such as marketing, labor, and technology.

"We must return creativity to the center of the company, increase accountability, improve results and ensure the quality of our content and experiences," Iger said.

Iger said that the company would reorganize into three segments: an entertainment unit encompassing film, TV, and streaming, a sports-focused ESPN unit, and Disney parks, experiences, and products.

He emphasized that the company's streaming services, which include Disney+, ESPN+, and Hulu, will remain its " #1 priority". But he added that "we're not going to abandon the linear or the traditional platforms while they can still be a benefit to us and our shareholders."

Wall Street reacts

While Disney employees can't be happy about the news, Wall Street liked what they heard, as Disney shares surged 6% in after-market trading. After tanking in 2022, stock prices have increased 26 percent this year.

Iger shared quarterly P&L numbers that were better than many analysts expected.

Disney's streaming subscribers were down only 1%, from 164 million to 162 million. But ESPN+ and Hulu subscriber numbers were up 2%. Disney's theme parks brought in $2.1 billion in profit, up 36 percent from last year.

The reorg marks a new chapter for Iger, who first became Disney CEO in 2005 and retired in 2020, only toreturn in 2022.