Disney is tightening its belt.
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The media and resort company’s CEO Bob Chapek wrote in an internal memo sent to Disney leaders on Friday that it will embark on cost-cutting initiatives, from slimming down business travel to reducing hiring to potentially laying off employees, CNBC first reported.
“I am fully aware this will be a difficult process for many of you and your teams. We are going to have to make tough and uncomfortable decisions,” he wrote.
The move comes after Disney reported disappointing quarterly earnings last Tuesday. Its streaming business grew more quickly than analysts expected, but it’s still losing $1.47 billion a year, though that loss has been part of Chapek’s stated plan to build out streamers including Disney+. It reported $20.15 billion in quarterly revenue, below analysts’ expectation of $21.25 billion, per Reuters.
The company’s stock dropped some 13% based on the earnings report but has recovered somewhat since. It was the worst single-day drop for Disney in more than 20 years, Bloomberg noted.
Chapek told executives one of the first orders of business is to cut costs in areas including content, marketing, and travel.
Many businesses have been cutting costs amid fears of a recession. Tech companies such as Meta and Snap have implemented expense-reducing strategies including layoffs.
Related: Meta Will Let Go of 11,000 Employees in Company’s First Large-Scale Layoffs
“In the immediate term, business travel should now be limited to essential trips only,” Chapek’s email said.
When it comes to meeting with coworkers or going offsite, “As much as possible, these meetings should be conducted virtually,” it added.
As for content, “While we will not sacrifice quality or the strength of our unrivaled synergy machine, we must ensure our investments are both efficient and come with tangible benefits to both audiences and the company,” it noted.
There were also some distinct warning bells as far as labor expenses go. Chapek said the company will implement a “targeted hiring freeze” and that hiring for only the most important roles will continue.
The memo also hinted that there could be layoffs, which Disney has not publicly addressed.
“As we work through this evaluation process, we will look at every avenue of operations and labor to find savings, and we do anticipate some staff reductions as part of this review,” Chapek wrote.
Disney did not immediately respond to a request for comment.
