Disney CEO Bob Iger announced that the company is set to begin the first of three rounds of employee layoffs this week.

The corporation will lay off a total of 7,000 employees by the end of the three waves.

Here’s what we know.

Why Disney is slashing 7,000 jobs and $5.5 billion in costs

What did Bob Iger say?

CNN reported that in a memo it obtained Iger announced the first set of layoffs to begin this week and that managers will start notifying employees that will be cut off in the weeks to come.

“The difficult reality of many colleagues and friends leaving Disney is not something we take lightly,” Iger wrote in the memo. “In tough moments, we must always do what is required to ensure Disney can continue delivering exceptional entertainment to audiences and guests around the world — now, and long into the future.”

The Deseret News reported that Iger told analysts, “While this is necessary to address the challenges we’re facing today, I do not make this decision lightly.”

Iger continued, “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.”

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Why is there a massive layoff at Disney?

In order to save $5.5 billion across the company, Disney decided to cut jobs, according to Florida Today.

Iger said the layoffs are part of a “strategic realignment of the company, including important cost-saving measures necessary for creating a more effective, coordinated and streamlined approach to our business.”

TechTarget reported that some companies are beginning to lay off employees as one of the first cost-cutting methods in order to meet their increased expenses due to inflation.

Other companies such as Warner Bros. have already begun their layoff plans in order to meet the cost demands of their business today.

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When were the layoffs announced?

The Deseret News reported about the massive layoffs back in early February and that these cuts would take 4% of the corporation’s workforce.

Along with the layoffs, Disney announced plans to restructure the company into three different divisions in order to meet its goal of saving $5.5 billion.

Bloomberg reported that the divisions will be: the ESPN sports networks unit, the theme-park unit and the entertainment unit that will streamline movie and TV.

The Deseret News has reached out to the Walt Disney Company for comment and has not yet heard back.