Disney is set to eliminate 7,000 jobs, CEO Bob Iger said on the company's earnings call on Wednesday.
The company is targeting a total of $5.5 billion in cost savings, Iger said. In all, $3 billion in cuts will come from content, excluding sports, he added; while $2.5 billion will come from non-content cuts.
"This reorganization will result in a more cost-effective, coordinated and streamlined approach to our operations," said Iger, who rejoined the company as CEO in November. "I do not make this decision lightly."
The eliminated jobs amount to roughly 3% of the company's 220,000 workers worldwide, according to a securities filing made in October.
The move will coincide with a restructuring that will divide the company into three core businesses: Disney Entertainment, ESPN and Disney Parks, Iger said.
Shares of Disney, the parent company of ABC News, rose nearly 8% in after-hours trading.
The cutbacks arrive amid a string of layoffs in the media industry. Warner Bros. Discovery, Dotdash Meredith and Vox Media are among the companies that have slashed jobs in recent months.
Jessica Reif Ehrlich, an analyst at Bank of America who closely follows Disney, told ABC News before the earnings call that she expected Iger to address jobs at the company.
"There's nothing worse than anyone wondering whether they'll have a job or not," Ehrlich said. "There's nothing worse than people walking around saying, 'What are you hearing?' 'What are you hearing?'"
"The certainty is the most important thing," she added.
Before the announcement, the company released an earnings report that exceeded Wall Street expectations on revenue. Disney brought in $23.5 billion in revenue over the three months ending in December, which marked an 8% growth over the same period a year prior.
But the company's streaming service, Disney+, lost subscribers for the first time since its launch in 2019. The service dropped 2.4 million subscribers, more than analysts expected.
Beset by cord-cutting that threatens its mainstay traditional TV business, Disney has grown the audience for its bundle of streaming services; but the new platform has yet to turn a profit.
The company also faces a high-profile proxy fight from Nelson Peltz, CEO and founder of activist investment firm Trian Management LP, which has purchased nearly $1 billion worth of Disney stock.
Peltz has called on Disney to prioritize profit growth, cut costs and clarify its succession plans, demanding a seat on the company's board for himself or his son.
Disney rebuked Peltz's campaign in a securities filing last month, saying Peltz had "no strategy, no operating initiatives, no new ideas and no plan."
Disney is the parent company of ABC News.
This is a developing story. Please check back for updates.