The Trials of a New Era for Walt Disney: The Gap Between "Magic" and "Reality" Highlighted by Global Layoffs

1. Shockwaves from the "Dream Factory"

On June 2 (U.S. time), the Walt Disney Company acknowledged that it had "implemented layoffs affecting hundreds of people worldwide." The layoffs spanned various departments, including film and TV marketing, TV publicity, casting, development, and corporate finance, impacting a wide range of divisions while avoiding the dismantling of entire teams. Although the specific number of layoffs was not disclosed, a spokesperson commented that this was part of an initiative to enhance operational efficiency in response to a rapidly changing industry.

This move is an extension of the "7,000 job cuts and $5.5 billion cost-cutting plan" announced by CEO Bob Iger in 2023. As they work to reduce the deficit of streaming, particularly Disney+, and maximize profits from the parks and resorts business, the cost target for fiscal 2025 has been increased to $7.5 billion.bloomberg.co.jp

2. Can "Good Earnings" Protect Jobs?

Ironically, just a few weeks before the layoff announcement, Disney reported increased revenue and profits for the second quarter of fiscal 2025. The theme park division recorded its highest-ever profit margin due to rising customer spending and increased occupancy rates, and streaming subscriptions reportedly increased by 1.1 million.

Despite this, the background to the decision to proceed with layoffs, as pointed out by Bloomberg, is that "the entire Hollywood industry is entering a 'negative spiral' due to soaring production costs and a slowdown in the advertising market, with a growing movement to prepare for an upcoming recession."bloomberg.co.jpIn short, the management's true sentiment is that "profits are growing, but the future is uncertain."

3. Social Media Reflects the "Cracks in the Magic"—Differences Between the World and Japan

The news spread instantly with hashtags like <#DisneyLayoffs> and <#ディズニー解雇> immediately after the announcement. On X (formerly Twitter) in the U.S., posts mocking "Go Woke, Go Broke" went viral, with conservative influencers condemning it as "the inevitable consequence of creating works that ignore fans." Netflixjunkie reported on this "right-wing applause."netflixjunkie.com

Meanwhile, on Japanese timelines, concerns about balancing quality and employment were more prevalent, with comments like "worried about the morale of the cast" and "fear of increased outsourcing and AI scriptwriting." Tracking <ディズニー 解雇> on Yahoo! Real-time Search,

"The parks are profitable, but they cut the headquarters instead of the field"
"Is the sequel to my favorite work okay?"
"Is Japan's OLC (Oriental Land) safe?"
Posts like these flow in every few minutes.news.livedoor.com

Furthermore, a popular Disney information YouTuber in Japan, "Disney Research Department," held an emergency live stream, where the chat was flooded with concerns like "Will there be another price increase?" and "Are the DLR live streaming staff also affected?" The live archive surpassed 300,000 views in 24 hours.youtube.com

4. Deciphering the Truth Behind the Layoffs from Three Perspectives

4-1 The "Final Bill" of Streaming Deficits

The rapid expansion of Disney+ since 2020 significantly increased content investment, with annual production costs surpassing Netflix. Ironically, during the pandemic recovery period, the advertising market deteriorated, and deficits expanded. Since 2021, cost-cutting has been a three-pronged approach: "reallocation of content production costs," "optimization of marketing expenses," and "back-office efficiency." This round of layoffs targeted the final stronghold—"personnel costs."

4-2 Cannibalization by AI and Digital Advertising

The reduction in the marketing department is also a reflection of the introduction of generative AI for automatic trailer editing and AI ad planners. In fact, Disney plans to start operating the generative AI tool "DisneyCreate" internally by the end of 2024. There are even reports from the production department that "AI analyzes movie scripts and automatically extracts promotional points." The structure where AI competes with human resources is likely to spread throughout Hollywood.

4-3 Even with "Park Boom," Japan is an Exception

Oriental Land (OLC), which operates Tokyo Disney Resort, is not subject to this round of layoffs. However, the downsizing of the corporate department at headquarters may narrow the window for license negotiations and IP management, potentially affecting the speed of planning "Japan-exclusive events." OLC's public relations commented that "there is no impact on operations at this time," but fan communities are wary, fearing it may be a precursor to the downsizing of fireworks shows.

5. Is it Possible to Balance Employment and Creativity?

Disney emphasizes that "there will be no dismantling of entire teams," but voices from the development and casting sites say, "Mid-level producers suddenly disappeared, and ongoing projects were shelved." U.S. media analysis company Parrot Analytics predicts that "production schedules for over 20 major films will be delayed by the end of 2025." The decline in creators' morale is likely to cast a shadow over the "magic" of new works.

6. Expert Comments—Three Perspectives

• Kohei Chida (Professor, Waseda University Business School)
  "Disney, as a 'diversified empire,' can absorb risks across departments, but this time they cut personnel close to core IPs. Considering long-term brand value, there is a concern that 'short-term shock therapy' may backfire."

• Katie Minahan (Hollywood Union Consultant)
  "If another mass departure occurs in Los Angeles after the strike ends, it will create a 'talent air pocket' with a shortage of skilled staff on set, leading to a vicious cycle of declining work quality."

• Manami Morikawa (SNS Marketing Planner)
  "Japanese fans have a strong desire to 'protect their favorite works and park experiences.' If Disney reduces PR in the future, highly enthusiastic UGC (user-generated content) will be key to maintaining the brand."

7. Actions Japanese Fans and Investors Should Take

1. Stay Updated with Information
   The progress of layoffs will be revealed gradually. Check both official IR and industry media, and avoid spreading information at the rumor level.

2. Understand "Headquarters Trends ≠ Park Operations"
   In OLC's financial results, both sales and profits are expected to reach record highs from 2022 to 2024. The possibility of large-scale restructuring immediately affecting Japanese parks is low.

3. Support the Brand with UGC
   Sharing positive experiences and creative fan works on social media can complement the reduction in official advertising expenses.

8. Conclusion—Who Supports the "Magic"?

Walt Disney's legacy was that "magic is created by people." This round of layoffs has exposed the "tightrope walk of management" in distinguishing between cost-cutting and investment in the future. For Japanese fans, this is not someone else's problem. The works, park experiences, and communities all depend on a global supply chain and labor environment.

"There is always a 'person' behind the story."
When this obvious premise is shaken, what color will the "magic" of Disney that we see turn into?