Disney Stock Surges Despite Legal Woes and Layoffs as Revenue Outshines Expectations
1min read March 6, 2025 – the walt disney company has been navigating a tumultuous period as it faces significant legal and financial challenges. Recently, a federal securities lawsuit alleged that disney failed to disclose essential information about its Disney+ streaming platform. Reports indicate that Disney+ has suffered from slowing subscriber growth, operational losses, and cost mismanagement. It was further alleged that certain costs were concealed by initially broadcasting content on traditional channels before making it available on Disney+.
In addition to these legal hurdles, Disney is undergoing substantial restructuring efforts. The company is reportedly cutting approximately 200 jobs within its ABC News Group and Disney Entertainment Networks divisions. This reduction represents almost 6% of staff across these units, aiming to streamline operations amid financial pressures. ABC's popular programs like “20/20” and “Nightline” are set to merge into a single unit, while leadership in the "Good Morning America" program is being consolidated.
These layoffs follow an extensive workforce reduction since the beginning of 2023, with Disney reportedly eliminating more than 8,000 jobs as part of its broader cost-cutting initiatives. The cuts are attributed to declining revenues and profits from Disney's traditional broadcast and cable television sectors.
Despite these challenges, Disney released positive financial outcomes in its latest earnings report. For the fiscal first quarter of 2025, the company posted a 5% increase in revenue, reaching $24.70 billion, slightly surpassing analysts' estimates. The adjusted earnings per share stood at $1.76, also exceeding forecasts. However, Disney's subscriber numbers for its streaming services remained critical, with 178 million subscriptions for Disney+ Core and Hulu combined.
Furthermore, Disney has secured a substantial new credit facility with a limit of up to $52.5 billion, indicating its ongoing strategy to ensure liquidity and financial stability. These developments illustrate Disney’s strategic efforts to balance its streaming ambitions with cost management and financial health.
