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Walt Disney Company announced Wednesday on a call with investors that it expects to cut 7,000 jobs this year — or about 3.6% of its global workforce — as part of a broader restructuring plan and a bigger effort to save $5.5 billion in costs.

The big picture: In light of financial pressure from Wall Street, CEO Bob Iger reiterated his plan to make Disney more efficient while also bolstering the company's streaming business.

Iger had vowed to reorganize the company when he was renamed CEO late last year, undoing most of the organizational changes made under former CEO Bob Chapek

Details: Disney will be aiming to return greater authority to the company's creative leaders and would make "them accountable to how their content performs financially," Iger said.

The former structure, he said, "severed that link."

Creative teams will be responsible for "what content we're making, how it is distributed and monetized, and how it gets marketed."

"Managing costs, maximizing revenue, and driving growth from the content being produced will be their responsibility," he added.

Between the lines: The new organizational structure, which will be implemented immediately, will divide the company into three parts: 

Disney entertainment: Dana Walden and Alan Bergman will lead the unit as co-chairs, and will oversee all of Disney's entertainment, media and content businesses globally, including streaming. Walden rose the ranks through Disney after joining the company in 2019 through its acquisition of Fox's entertainment properties. Bergman has been with Disney since 1996. He was formerly co-chairman of Walt Disney Studios. 

ESPN: Jimmy Pitaro will continue to serve as ESPN's chairman, overseeing ESPN networks, ESPN+ and Disney's international sports channels. Pitaro joined Disney in 2010. He has led a number of businesses in addition to ESPN, including Disney Interactive and consumer products and interactive media.

Disney Parks, Experiences and Products: Josh D'Amaro will continue serving as chairman, overseeing Disney's theme parks, resorts, cruises, consumer products, games and publishing businesses. D'Amaro has been with Disney for more than two decades, spanning roles across various Disney parks and experiences units. 

Disney stock dropped 44% in 2022, but was up 5% in after-hours trading after the new changes and the company's fourth-quarter earnings report were announced.

By the numbers: Reductions to Disney's non-content costs will total roughly $2.5 billion, and already, $1 billion in savings is already underway. 

The company expects to deliver approximately $3 billion in savings over the next few years, excluding sports. 

Of note: Disney is one of several media and tech companies to recently announce major layoffs, following in the footsteps of Amazon and Google.

Disney reported its first-ever subscriber loss for Disney+, likely due to a price hike for the service that went into effect late last year, but losses were still smaller than what Wall Street was expecting. 

Iger also put to bed any rumors that Disney was considering spinning off ESPN. 

What's next: Like Netflix, Iger said Disney will no longer provide long-term subscriber growth guidance, because the company wants to instead prioritize "enduring growth and profitability in the company's streaming business."

Disney expects that Disney+ will be profitable by the end of fiscal year 2024. 

Disney to lay off 7,000 employees amid major restructuring

The layoffs will impact roughly 3.6% of its global workforce, according to Reuters.

Photo of the Disney storefront across the street from pedestrians

The media brand Disney Store  in London, United Kingdom on Sept. 7, 2022. Photo: Mike Kemp/In Pictures via Getty Images

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After a record economic expansion, the coronavirus pandemic sent the U.S. economy into a recession as unemployment soared to staggering heights. The country now faces urgent questions about how much stimulus is needed for reeling consumers and businesses, and what a recovery might look like.

Economy & Business

From the Valley to D.C., Big Tech players like Facebook, Google and Amazon are under more scrutiny than ever as new technology develops and privacy and antitrust concerns grow in lockstep with companies’ ambitions.

Technology

The U.S. economy added 517,000 jobs in January, and the unemployment rate fell to 3.4% — the lowest level in over a half-century, the government said on Friday.

Why it matters: Employers added jobs at an unexpectedly rapid pace, the latest sign of a hot labor market despite aggressive moves by the Federal Reserve to cool it down.

The numbers are more than double the 190,000 forecasters anticipated.

Details: The extraordinary report comes as the Fed continues to dial back its pace of interest rates and prepares to raise rates further to restrain the economy and chill still-high inflation.

Fed chair Jerome Powell has acknowledged progress on slowing inflation in recent months while noting risks lie ahead. Among them is wage growth, which is rising at a pace still too swift for the Fed's comfort.

In January, average hourly earnings rose 0.3% — or 4.4% over the previous year, according to Friday's data.

The big picture: The data also showed that employment in 2022 was even stronger than initially thought, with roughly 568,000 more jobs than previously reported.

The update was part of the Labor Department's annual revisions, which incorporate more complete data from insurance records and updated seasonal adjustments.

Editor’s note: This is breaking news. Please check back for updates.

U.S. economy adds whopping 517,000 jobs in January

A "help wanted" sign displayed in a window of a store in New York City. Photo: Spencer Platt/Getty Images

Jobs report

President Biden has made the COVID-19 crisis and a post-Trump return to national unity and traditional democratic ideals his top priorities. From vaccinations to stimulus to schools, Biden is seeking bipartisan compromise while showing a willingness to use executive authority and bare Democratic majorities in the U.S. House and Senate to implement his policies. Republican leaders are navigating deep party divisions over if and how to move beyond former President Trump.

Politics & Policy

Job openings rose in December, while layoffs edged up only slightly, the Labor Department said on Wednesday — the latest sign employers are eager for workers. 

By the numbers: There were 11 million vacancies in the final month of 2022, up from 10.4 million in November. Meanwhile, there were 1.5 million layoffs — slightly higher from the 1.4 million the prior month, though still historically low.

Why it matters: The labor market is still tight with only modest signs of loosening up. Despite a steady stream of layoff announcements in sectors like technology, there are still more job postings than workers available to fill them.

The data is closely watched by the Federal Reserve, which sees the elevated number of open jobs as proof that the labor market is out of whack. 

Fed officials have raised concerns that a too-tight labor — as signaled in part by high job openings — might complicate efforts to stamp out inflation.

Of note: There are signs that the labor market has cooled off. For one, the number of quits has come down, though it's still elevated relative to pre-pandemic times. In other words, workers still feel confident enough about the jobs market to leave their current gig — though perhaps less so than 2021.

In December, roughly 4.1 million workers quit their jobs — down from the all-time high of 4.5 million in November of 2021. 

Signs of weakness in tech were apparent in the report: the rate of job openings in the information sector fell to 3.4% from 6.6% in December. 

What to watch: New data from ADP points to a notable slowing in private sector hiring last month, adding just 106,000 jobs last month — far fewer than the estimated 190,000. 

Yes, but: The report isn't a perfect indicator of what's to come in the official government jobs report. Plus, ADP said the slowdown had less to do with factors that suggest a big shift in hiring patterns and more to do with extreme weather last month that disrupted employment in sectors like construction.

Editor's note: This story has been corrected to show job openings rose in December, not last month.

Job openings jumped in December

Layoffs ticked up only slightly, the latest sign most employers are plenty eager for workers.

Finish Line

Axios Finish Line

The recent wave of layoffs in the tech industry and beyond is exposing a harsh reality of the remote and hybrid working world.

Virtual layoffs add a layer of loneliness and stress distinct from in-person job cuts.

Driving the news: Some 58,000 tech workers have already been laid off this month, per Crunchbase News. And around 140,000 were let go in 2022.

Thousands of those workers are getting laid off in their home offices or living rooms — immediately losing access to email, Slack and their community of colleagues, The New York Times' Emma Goldberg writes.

The experience is especially jarring for younger workers, many of whom joined their jobs remotely.

Madeline Whitney, a 2022 college graduate, was working from home when she was laid off from Yext, a midsize tech company, this week. She joined a morning call that popped up on her calendar, and after a five-minute conversation, her job was gone. Within 15 minutes, her email was cut off.

"The hardest thing was that we didn't get to say goodbye," she says.

Her colleague Anna Karl, another new graduate, was laid off the same day. "When you're dealing with the hybrid environment, you don't have people there for you to talk about it or ask for recommendations for new jobs," she says. "There are so many people I loved working with that I'll probably never see again."

The big picture: Another anxiety for laid-off remote workers is finding their next job.

41% of office workers are confident in their ability to find a new job in a month if they’re let go, compared with 24% of remote workers, per a recent CNBC/Momentive Workforce Survey.

And remote workers who are let go may not be able to keep that flexibility and continue working from home. Per LinkedIn data, demand for remote jobs is outpacing supply, with two applications for every remote position.

What to watch: As remote firings become a part of our new reality, managers will have to figure out how to handle these conversations.

“No fire announcements should be made by e-mail or messenger, and certainly not during group calls,” Pavel Podkorytov, founder of San Francisco-based HR platform TalentService, told Axios' Javier David.

The bottom line: Layoffs spotlight one of the toughest parts of remote work — how isolating it can be, David notes. Some conversations are just better in person.

Lonely layoffs in the work-from-anywhere world

Layoffs expose a harsh reality of the remote world.

Illustration of a stack of pink slips with a pointing finger cursor holding them up

Remote work

U.S. economy expands at 2.9% annual rate in fourth quarter

Over the calendar year, GDP grew by 2.1% in 2022.

Gross domestic product (GDP)

Stock market

Retail

Google CEO Sundar Pichai said Friday the company is planning to lay off 12,000 people, becoming the latest tech company to slash jobs after rapid expansion during the pandemic.

The big picture: Tech layoffs started soaring late last year, becoming the new normal for an industry that is slowly losing its appeal.

Driving the news: Pichai said in a memo posted on Google’s blog Friday that an email had already been sent to U.S. employees who will be affected by the layoffs. The process for international employees "will take longer due to local laws and practices," he said.

“Over the past two years we’ve seen periods of dramatic growth," Pichai wrote on the Google blog. "To match and fuel that growth, we hired for a different economic reality than the one we face today."

He said Google plans to eliminate jobs after a review "across product areas and functions to ensure that our people and roles are aligned with our highest priorities as a company."

Details: Pichai said Google will pay employees during their full notification period, with a minimum of 60 days along with a severance package, which will begin at 16 weeks salary with an additional two weeks of pay for every additional year worked at Google.

Zoom out: Google is the latest major company to make drastic job cuts. Microsoft said earlier this week it plans to lay off close to 10,000 workers. Amazon announced in early January it would cut 18,000 jobs and Salesforce said it plans to lay off 10% of its staff. 

More cuts are expected this year given the aggressive expansion by many tech companies during the pandemic, Axios Seattle’s Christine Clarridge writes. The threat of layoffs and instability have only lessened the appeal of these tech jobs, which once seemed immune to the broader economy.

Tech layoffs are a stock price problem, not an economic problem

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Alphabet plans to lay off 12,000 Google workers

Google is the latest tech company to slash jobs after rapid expansion during the pandemic.

A sign outside of Google's office in San Francisco, California.

A sign outside of Google's office in San Francisco, California. Photo: Justin Sullivan/Getty Images

Google

Some of the biggest tech companies in the country have laid off thousands of workers in recent months, and there doesn’t seem to be an end in sight.

Why it matters: The continuous layoffs represent a massive fall from grace for Silicon Valley, which seemed on top of the world early last year, Axios’ Ina Fried writes.

The big picture: Layoffs have become tech’s new normal, Fried writes. The industry, which saw rapid growth during the COVID-19 pandemic, is now feeling the impact of the broader economy.

The COVID-19 pandemic and the behaviors it cultivated, such as remote work and buying groceries online, prompted tech companies to hire rapidly and aggressively, Margaret O'Mara, a University of Washington professor, previously told Axios.

When inflation hit the U.S. hard, the Fed raised interest rates, which caused the economy to soften. Growth stalled from there.

That happened as people returned to pre-pandemic habits. The tech industry, had invested in the habits and behaviors it saw during the pandemic, suffered as a result.

The "war for talent" during the boom period led to companies hiring too fast and spent too much in doing so, showing “sloppy” behavior, one recruiter told Axios.

By the numbers: More than 1,000 tech companies have laid off over 150,000 people since 2022, per Layoffs.fyi. 

Those include cuts at tech giants — from Google to Meta to Twitter.

Flashback: The tech industry’s recent troubles call back to the turn of the millennium, when tech stocks plunged after reaching then-peaks, Axios’ Scott Rosenberg and Sara Fischer write. 

Companies then began laying off people and cutting payroll to deal with a looming recession.

Yes, but: Today's large tech companies are still making a lot of money. 

The layoffs are a stock problem and not a sign of economic trouble, Axios’ Matt Phillips writes. 

Layoffs will likely continue as companies restructure and cut back their payroll in an attempt to please investors and boost profits, Fried writes.

The bottom line: As Axios' Felix Salmon pointed out, tech companies plan for tomorrow, but when tomorrow doesn’t come, layoffs do.

Why the tech layoffs are happening and what's next

The rounds of layoffs represent a massive fall from grace for Silicon Valley.

Meta, formerly Facebook, corporate headquarters is seen in Menlo Park, California on November 9, 2022.

Meta corporate headquarters is seen in California on Nov. 9, 2022. Photo: Josh Edelson/AFP via Getty Images

Big Tech

New York City is gearing up for a potential strike on Monday as roughly 10,000 nurses push for higher salaries and better working conditions, AP reports.

Why it matters: The onset of the pandemic exacerbated the health risks, staffing shortages and burnout that weigh on healthcare workers — to the point of threatening patient care. 

The conflict between New York City's major hospitals and their nurses is part of a nationwide movement that has seen a slew of healthcare workers launch strikes across the U.S.

Details: The New York State Nurses Association, comprised of roughly 42,000 union members, gave the hospitals 10 days' notice of an intended strike on Dec. 30. Their contracts expired on Dec. 31.  

The Flushing Hospital Medical Center reached a tentative agreement with nurses on Friday while negotiations continue with Montefiore Medical Center and the BronxCare Health System, AP reports.

But negotiations with Mount Sinai appeared to fall through on Friday. The union said management walked away from the bargaining table during a discussion on salary, per AP.

Union leaders have said they hope to avoid striking, which is set to start Monday if no agreement is reached.

What they're saying: "New York City hospitals have violated our trust through years of understaffing, and that understaffing has only gotten worse since the start of the COVID-19 pandemic," union President Nancy Hagans said at a press briefing Friday. "It’s time they ... deliver the safe staffing standards that nurses and our patients deserve."

"Striking is always a last resort. We’ve done everything we could to avoid a strike — and we will keep working toward a fair union contract," Matt Allen, the union's director at large and a nurse at Mount Sinai, wrote in an opinion for the New York Daily News.

"Management has pushed us to the breaking point by refusing to listen to the alarms we’ve been sounding about chronic understaffing that puts our patients at risk."

The other side: Mount Sinai said in a statement Friday that its offer included a wage increase totaling 19.1% compounded over three years and that it was comparable to the union's tentative agreement with the NewYork-Presbyterian Hospital.

 "Unfortunately, we remain at an impasse over the union leadership’s demand for a significant wage increase beyond what was agreed to at other hospitals."

The hospital added that it has canceled some elective surgeries and is transferring some patients from its flagship hospital and two affiliates in anticipation of the strike.

The big picture: COVID-19 and its aftereffects have triggered a mass exodus of healthcare workers and led those who remain to organize and demand workplace changes. 

National Nurses United, a labor union comprised of more than 175,000 members across the country, organized several strikes in January to push the hospital industry to "invest in safe staffing."

NYC hospitals brace for potential nurse strike amid salary, staffing negotiations

Roughly 10,000 nurses are set to go on strike Monday if hospitals fail to reach an agreement over salaries and staffing.

Photo of a masked person holding a sign that says "Patients First" at a rally protesting staffing shortages

Nurses at Brooklyn VA Medical Center and veterans hold a rally to protest staffing shortages on Aug. 31, 2022. Photo: Lokman Vural Elibol/Anadolu Agency via Getty Images

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Coronavirus

Public health

The U.S. faces a range of health care flashpoints — unaffordable drugs, opioids, vaping — as we debate whether to adopt universal care. For now, the Affordable Care Act is the law of the land, but Republicans want to issue it a final death blow.

Health

Change in U.S. nonfarm payrolls

Employers finished the year with a burst of hiring: The economy added 223,000 jobs in December, while the unemployment rate fell back to a half-century low of 3.5%, the Labor Department reported on Friday.  

Why it matters: The labor market is still chugging along with healthy demand for workers, the latest sign that the economy is holding up despite recession fears. 

December's payroll gains are slightly higher than the 200,000 that economists forecast for the month. 

Jobs growth moderated from November's gains, which were revised down to 256,000. In October, updated figures show the economy added 263,000 jobs, 21,000 fewer than initially estimated.

Details: Average hourly earnings, one measure of wage growth, rose by 0.3% in December or 4.6% over the past 12 months — a slightly slower pace than the 0.4% monthly rise in November (which was revised lower from 0.6%). 

The share of people employed or searching for work, known as the labor force participation rate, ticked up only slightly to 62.3%, compared to 62.1% in November. 

The big picture: In an attempt to crush inflation, the Federal Reserve has swiftly raised interest rates and signaled further increases ahead. While job growth has moderated, the labor market has stayed resilient — a welcome development for workers.

The Fed, however, is concerned that hot demand for too-few workers will cause employees to keep raising wages in a way they view as unsustainable, and stoke inflation. 

Where it stands: The December jobs data is one of the last major labor market indicators of 2022, a solid year of job gains that brought the nation back to pre-pandemic levels of employment, and then some. (It is still short of the level where it would have been had the pandemic not happened at all.)

The economy added more than 4.5 million jobs last year, with an average of roughly 375,000 jobs added each month.

But overall labor force participation rate remains stubbornly below its pre-pandemic level. Some of that shortfall is due to deaths from COVID-19, but other reasons include excess retirements and slower immigration. 

Editor's note: This is story has been updated with additional details and a chart.

U.S. adds 223,000 jobs in December, capping a strong year for the labor market

The labor market is still chugging along with healthy demand for workers.

A measure of inflation watched closely by the Federal Reserve showed yet another month of cooling price increases, the Commerce Department said on Friday. 

Why it matters: It's the latest data to point to a slowing of still-high inflation — alongside moderating consumer spending — as the Federal Reserve raises interest rates aggressively to slow the economy in an effort to get inflation down to its 2% target. 

By the numbers: The personal consumption expenditures (PCE) index rose 5.5% in the 12 months through November, down from 6.1% in the prior month.

Core PCE, which excludes food and fuel costs, rose 4.7%, slowing from the 5% in October.

The report also offered details about consumer spending, savings and income in November. After-tax incomes rose 0.4%, outpacing the 0.1% monthly rise in the PCE index (and the 0.2% monthly rise in core PCE). 

Still, consumer spending slowed notably from the prior month. It rose just 0.1% in November as consumers spent more on housing and less on new trucks. That is down from 0.9% in October, which was revised 0.1 percentage point higher.

The personal saving rate rose slightly to 2.4%, 0.2 percentage points higher than in October; though still among the lowest levels on record.

In recent months, consumers have saved a much smaller portion of their income relative to the early days of the pandemic, amid lockdowns and government stimulus payments.

Key inflation gauge shows price increases cooled again in November

It's the latest data to point to slowing of still-high inflation.

Photo: David Paul Morris/Bloomberg via Getty Images

Inflation

Data: Bureau of Labor Statistics; Chart: Axios Visuals

January's headline labor market numbers were off-the-charts strong, with 517,000 jobs added and a five-decade low in the jobless rate.

New data out Wednesday morning will give us a look under the hood of what was happening.

Driving the news: For the reasons described above, the upcoming Job Openings and Labor Turnover Survey has greater-than-usual significance. Forecasters expect it to show the number of job openings falling to 10.5 million, from 11 million in December.

That would be evidence of a meaningful slowdown in the job market in spite of January's booming figures.

In December, JOLTS surged unexpectedly from 10.4 million to 11 million — yet another indicator of a too-hot-for-comfort job market.

The intrigue: Job openings, however, have been a volatile indicator of the state of the labor market. They may not be the best indicator of what's really going on.

The rate of quits (people voluntarily leaving their jobs) and discharges (people leaving less-than-voluntarily) could be more instructive of whether there is softening in the job market underway not apparent in other data.

Forecasters expect meaningful slowdown in job market

The upcoming Job Openings and Labor Turnover Survey is expected to show the number of job openings falling to 10.5 million, from December's 11 million.

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