Disney lays off more than 300 streaming-focused employees in China

Walter Disney Co.

DIS 2.16%

has laid off more than 300 Beijing employees working on its streaming services, according to people familiar with the situation, as part of a cost-cutting and restructuring effort at the entertainment company.

The layoffs in China come after Disney this week began implementing the first wave of cuts in a previously announced plan to cut 7,000 jobs.

The layoffs in China affected tech workers who worked on features such as personalization, search and customer identification for Disney’s streaming services, the people said.

Disney said in a statement that the move in China is “part of the company’s cost-cutting efforts and global reorganization.”

Disney has made streaming a spearhead of its business. It operates a number of services, including the flagship Disney+, which is available in much of the world except mainland China, as well as ESPN+ and Hulu in the US and Disney+ Hotstar in Asia.

Disney+ had 161.8 million subscribers as of December 31; Hulu had 48 million; and ESPN+ had 24.9 million. Under pressure from investors to better control costs, the company has committed to be profitable for its streaming business by September 2024. Since the launch of Disney+ in 2019, the company’s streaming business has lost nearly $10 billion, according to financial disclosures.

Robert Iger returned as CEO of Disney in November, following the ouster of predecessor Bob Chapek, and soon announced that the company would be cutting $5.5 billion and reducing its workforce. He also reorganized the company’s corporate structure and eliminated the division that Mr. Chapek had created to make streaming and distribution decisions.

Among other cost-cutting measures, Disney recently cut its roughly 50-person team dedicated to developing metaverse strategies, The Wall Street Journal reported.

Disney also fired Isaac “Ike” Perlmutter, chairman of Marvel Entertainment LLC, and plans to merge its comic book publishing business into Disney Entertainment, the company’s content production division. Last year Mr. Perlmutter teamed up with his friend, activist investor Nelson Peltz, to try to persuade Disney to make Mr. Peltz to the board of directors.

Disney said it fired several other senior executives this week, including Chief Compliance Officer Alicia Schwarz, whose duties will be taken over by General Counsel Horacio Gutierrez. Others who have lost their jobs include Mark Levenstein, senior vice president of production at Hulu; Jayne Bieber, a top executive at the Freeform family network; and Elizabeth Newman, who oversaw creative acquisitions for 20th Television Studios and whose department has been disbanded.

Disney, which has offices in China, has spent more than a decade aggressively courting Chinese consumers and officials. Since the 1990s, many of the company’s biggest films have been shown in Chinese theaters – and blockbusters like “Avengers: Endgame” and “Avatar 2: The Way of Water” are among the highest-grossing films in the country’s history. Disney employees in China may consult with the country’s officials and distribution managers about securing such releases.

More recently, as relations between China and the US deteriorated, several Disney titles were among those rejected by Chinese Communist Party officials deciding whether to distribute a movie in the country. That has changed in recent months, as Disney releases like “Black Panther: Wakanda Forever” gained approval.

Disney’s ambitions in China extend beyond the box office. In 2016, after more than a decade of lobbying Chinese officials, the company opened Shanghai Disney Resort, a $5.5 billion theme park that is among the largest in the world.

To open the park, Disney had to agree to become a minority shareholder in the resort alongside several Chinese entities. Today it functions like any Disney park, with Marvel Studios superheroes for selfies and Mickey Mouse ears for sale.

Like other American-based media companies, Disney has had no luck getting its streaming service to China. Disney+ is not available in mainland China, part of Beijing’s broader effort to preserve the market for its own streaming services. Disney+ rivals like Netflix Inc.

access to Chinese consumers has also been denied.

Write to Jessica Toonkel at jessica.toonkel@wsj.com and Joe Flint at Joe.Flint@wsj.com

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