Disney is tightening its belt.
The resort and media company’s CEO, Bob Chapek, wrote in an internal memo sent to Disney leaders Friday that it will embark on cost-cutting initiatives, from reducing business travel to reducing hiring and potentially laying off employees. , CNBC first reported.
“I am fully aware that this will be a difficult process for many of you and your teams. We will have to make difficult and uncomfortable decisions,” he wrote.
The move comes after Disney reported disappointing quarterly earnings last Tuesday. Its streaming business grew faster than analysts expected, but it still loses $1.47 billion a year, though that loss has been part of Chapek’s stated plan to build streamers, including Disney+. It reported $20.15 billion in quarterly revenue, below analysts’ expectation of $21.25 billion, according to Reuters.
Shares of the company fell 13% according to the earnings report, but have rallied a bit since then. It was the worst single-day drop for Disney in more than 20 years, Bloomberg noted.
Chapek told executives that one of the first orders of business is to cut costs in areas including content, marketing and travel.
Many companies have been cutting costs amid fears of a recession. Tech companies like Meta and Snap have implemented cost-cutting strategies, including layoffs.
Related: Meta Letting Go 11,000 Employees in Company’s First Large-Scale Layoffs
“For the immediate term, business travel should now be limited to essential travel only,” Chapek’s email said.
When it comes to meeting with co-workers or going off-site, “to the extent possible, these meetings should be held virtually,” he added.
In terms of content, “while we will not sacrifice the quality or strength of our unrivaled synergy machine, we must ensure that our investments are efficient and deliver tangible benefits to both the public and the company,” he noted.
There were also a few different warning bells regarding labor expenses. Chapek said the company will implement a “targeted hiring freeze” and will continue hiring only for the most important roles.
The memo also hinted at layoffs, something Disney has not publicly addressed.
“As we move through this evaluation process, we will look at all avenues of operations and labor to find savings, and we anticipate some headcount reductions as part of this review,” Chapek wrote.
Disney did not immediately respond to a request for comment.