Disney asks managers to cut costs by 20% and prepares new layoffs

Disney is preparing another round of layoffs, and this time thousands of jobs are at stake. According to Bloomberg, leadership has asked some managers to find ways to cut annual expenses by 20%, with the savings to be assembled from layoffs and other cost reductions. Some divisions will be hit harder than others, but neither the exact number of positions to be cut nor the specific departments have been named. Disney declined to comment to Bloomberg.

An important caveat: 20% is the savings target, not the share of the workforce that is to be laid off.

Layoffs have run all year, and box office didn't save Pixar

For Disney employees, 2026 has turned into an unbroken series of cuts. In January the company announced a consolidation of its marketing operations that cost people their jobs. In April about 1,000 people were laid off, in July several hundred more, and in September another wave came. Separately, roughly 150 Pixar employees lost their jobs in July — and that despite a strong theatrical year for the studio, carried by “Hoppers” and “Toy Story 5”.

According to available information, CEO Josh D'Amaro intends to put part of the savings back in — into film and television, technology, theme parks and cruise ships.

Money for share buybacks and AI specialists was there

The cuts are not happening against a backdrop of crisis. In the third fiscal quarter Disney reported revenue of $25.25 billion (up 7%) and segment operating income of $5.6 billion (up 21%). The company raised its annual share buyback program to at least $9 billion.

In parallel, Disney is investing in AI. A month earlier it emerged that the company plans to spend about $180 million over three years on compensation and retention for 66 specialists from the bankrupt Character.AI, who moved to Disney following that company's former head, Karandeep Anand. Before that, in December 2025, plans were announced to invest about $1 billion in OpenAI along with a licensing agreement covering Sora — the deal fell apart a little more than three months later, before the money was transferred.

There is no direct confirmation that AI spending is being paid for with layoffs. But the priorities are visible in where the budget is growing and where it is being cut: funds are found for shareholders, for hiring AI teams and for technology, while those who make the films, run the parks and handle operations are told to do more with fewer people.

A limit on spousal health coverage — from 2027

The savings will also affect working conditions for those who remain. Starting in 2027, Disney will limit medical coverage for employees' spouses in cases where the spouse can obtain insurance from their own employer — even if that employer offers worse terms.

Why a growing company keeps cutting staff

What is happening at Disney looks like a continuation of the broader trend of recent years: media and entertainment corporations have stopped treating the size of creative and operational teams as a figure tied to a product's success. Revenue growth and headcount reduction coexist comfortably in the same quarterly report, because margin and returns to shareholders are what carry weight in a company's valuation.

Against this backdrop, a shift in technology priorities is also noticeable. Major studios are investing in AI expertise and poaching entire teams, while traditional production roles go through repeated waves of optimization. Even if one is not directly paid for by the other, professionals have to factor in the new alignment: the stability of a position likely depends more and more on whether its area is one the company has decided to invest in.

If the trend continues, two consequences for the CG market are likely. The first is a further migration of experienced modelers, animators and technical specialists out of studio staff positions into contract teams and small independent companies. The second is growing pressure on unions and bargaining positions: when cuts happen while profits are rising, the argument about unavoidable savings works less well, and the dispute shifts toward working conditions and benefits.

What is behind the layoffs at Disney amid rising profits — the failures of recent releases, the bet on share buybacks, the restructuring around streaming?