Disney Faces Reckoning: Massive Layoffs and Box Office Flops Signal a Troubled Path
We are witnessing a significant shift at Disney as the company implements widespread layoffs and grapples with a series of major box office disappointments. Our analysis suggests these challenges are deeply connected to a strategy that has increasingly alienated its core audience, proving the “get woke, go broke” narrative is indeed coming true.
Hundreds of employees have been impacted across Disney’s film, television, and corporate finance divisions in recent cost-cutting measures. While the exact number of staffers losing their jobs has not been officially disclosed, these cuts are extensive and affect various teams, including marketing for film and television, TV publicity, casting, development, and corporate financial operations. Individual employees were notified, though no entire team is being eliminated.
These recent layoffs represent the fourth and largest round of job cuts within the last ten months. Earlier reductions included nearly 200 staffers across TV and ABC News operations in March, 75 from ABC News and local stations in October 2024, and 300 people last September. In July 2024, another 140 employees were let go from the television division, primarily impacting National Geographic, Freeform, and locally owned TV stations. These cuts are attributed to economic headwinds facing the linear TV business and are described as more surgical than the major cost-cutting moves undertaken in 2023 shortly after Disney Chief Bob Iger returned as CEO.
However, we question whether these cuts are enough to offset the significant revenue drops seen from recent movie flops. Despite Disney topping Wall Street earnings forecasts for the first three months of 2025 and projecting a 16% earnings per share increase for the fiscal year ending September 2025, we believe this optimism is challenged by consistently losing hundreds of millions on new releases.
The Box Office Disconnect: A “Woke” Problem?
Disney has experienced several significant box office failures, many of which we believe fall within the “modern wokeism era”. Notable flops include:
- Snow White (2025)
- Wish (2023)
- Lightyear (2022)
- The Black Cauldron (1985)
Our deep dive into the box office performance of these films reveals a concerning trend. Take, for instance, Snow White (2025), which we contend absolutely and positively bombed because it “went woke”. Its disappointing global debut of $87 million fell short of 9-figure expectations, and it underwhelmed in the US with $43 million against a $50 million estimate. While some box office analysts dismiss the “go woke, go broke” narrative, attributing struggles to bad reviews or a failure to connect creatively, we maintain a different perspective.
From our analysis, the failure of Snow White is directly linked to the modernization of the classic 1937 story, including diversifying the cast and changing the plot line, along with the controversial public statements made by its lead actress, Rachel Zegler. We believe her comments—such as alienating the original audience by calling Prince Charming “weird and a stalker,” demanding payment for streaming, and asserting that a woman doesn’t need love—significantly contributed to the film’s tanking during its opening week. While the critic score of 43% on Rotten Tomatoes may have deterred audiences in later weeks, we are convinced it was not the primary reason for its initial collapse. We also suspect her stance against Israel may have influenced some movie reviewers. The CinemaScore of B+ further indicates the movie wasn’t completely satisfying to attending audiences.
A Tarnished Brand and Missed Opportunities
We observe that the Disney brand has become significantly tarnished, leading to a loss of trust among families who no longer feel comfortable taking their children to Disney movies or allowing them to watch Disney TV shows. This erosion of trust is a critical factor we have identified in the company’s struggles.
Even Pixar Animation Studios, a jewel in Disney’s crown, implemented its biggest layoff in history in 2024, firing 15% of its workforce. We believe this occurred right after the massive flop of Lightyear.
Despite these internal challenges, Disney’s stock has reacted positively to the layoffs, seeing an increase of 1% to 2% in the last week and 24% in the last month, demonstrating Wall Street’s favorable view of cost-cutting measures.
However, we firmly believe that unless Disney fundamentally changes its course and ceases “pushing all this nonsense,” the company’s long-term profitability remains in question. We highlight Lilo & Stitch (2025) as a recent success, with a global box office of $611 million on a reported budget of $100 million, making it profitable. We can’t help but wonder if its success is directly tied to the absence of the “woke nonsense” that has plagued other recent releases. It appears the media is desperate to avoid admitting that “we were right and they were wrong”.
