Disney/ABC TV has begun making long-feared layoffs as part of a broader restructuring of its broadcast business, with rumors swirling that bigger moves—including a possible sale of ABC—are coming.
Deadline first reported the staff reductions on Thursday, saying they could impact up to 200 employees across Disney and ABC properties. An ABC source with knowledge of the situation said that the cuts will hit upward of 40 of its employees on the East Coast and still more out west.
Multiple people at ABC told Splinter that there is a widespread belief at the network that the belt-tightening could be tied to a prospective sale by its corporate parent.
Disney’s broadcast division, which includes ABC and its local TV stations, is suffering from slumping ad rates and new competition from streaming services. The network’s top producer, Shonda Rhimes, creator of Grey’s Anatomy, Scandal, and How To Get Away With Murder, decamped from ABC for Netflix in August.
An ABC spokesperson declined to comment on the record regarding the layoffs, and didn’t acknowledge rumors that ABC was exploring a sale. But a person familiar with management’s thinking said the number of employees affected was “less than originally rumored,” emphasizing that a “majority of cuts came from non-content and operational functions.”
The layoffs come about six weeks after The Wall Street Journal reported that Disney was seeking to reduce its broadcast division’s headcount by roughly 300 en route to trimming as much as $300 million in costs. Earlier this summer, ABC also paid out at least $177 million to settle a defamation suit leveled by a beef processing company against its news division. That settlement, perhaps the largest of its kind in U.S. history, removed an even larger potential liability from ABC’s books.
Update, 2:27 p.m.: A spokesperson said the rumors of a potential sale of ABC are “untrue.”
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