Disney CEO Bob Iger announced some big changes for the company Wednesday in order to cut costs.

Disney plans to cut $5.5 billion in costs and lay off 7,000 employees, about 4% of the company’s workforce, The New York Times reported.

What did Bob Iger say about the job cuts?

“While this is necessary to address the challenges we’re facing today, I do not make this decision lightly,” Iger told analysts. “I have enormous respect and appreciation for the talent and dedication of our employees worldwide, and I’m mindful of the personal impact of these changes.”

The cuts come as Disney reported better than expected earnings, with revenue rising 8% to $23.5 billion in the fourth quarter of 2022, according to CNN Business.

However, Disney announced that its streaming service, Disney+, saw a decline in subscribers for the first time ever, losing over 2 million subscribers in the last quarter.

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How is Disney restructuring?

Iger also announced plans to restructure the company, including plans that puts streaming and content production int the same division, a move which Iger suggests will improve profit margins.

Disney will now be divided into three divisions: an entertainment unit, which combines streaming with its movies and TV, the ESPN sports networks and the theme-park unit, per Bloomberg.