ESPN began laying off employees Monday, part of a wave of cost-cutting at parent company Disney that will claim an unspecified number of jobs across all levels at the sports network in the coming months.
“As we advance as a core segment of Disney, with operational control and financial responsibility, we must further identify ways to be efficient and nimble,” Pitaro wrote in the memo. “We will continue to focus our workforce on initiatives that are most closely aligned with our critical priorities and emphasize decision-making and responsibility deeper into the organization.”
The two rounds of layoffs will primarily involve management. Once those layoffs have been executed, the company will begin scrutinizing on-air contracts, according to two people with knowledge of the plans.
Talent contracts, which are given to those who appear on TV or generate content across ESPN’s platforms, are generally for a specified length of time, a different arrangement from more traditionally salaried employees. A number of those contracts are expected to not be renewed or extended at lower values.
This round of cuts at ESPN is part of a larger effort across Disney to streamline the company. CEO Bob Iger returned to helm the company in November after a 2½-year absence and announced that he intended to cut or not fill 7,000 jobs. Iger’s return to Disney followed the company reporting $1.5 billion in operating losses in the fourth quarter of last year on streaming service Disney Plus, which includes ESPN’s streaming offering, ESPN Plus.
When Iger returned, he announced a company reorganization that made ESPN a core pillar of the newly imagined Disney, along with entertainment and parks. As part of the reorganization, Pitaro was put in charge of ESPN’s streaming operations. ESPN will file its own earnings report in November for the first time. Before the layoffs, ESPN had around 5,000 employees.
ESPN has committed billions of dollars to live sports in recent years, including signing a long-term deal with the NFL that costs around $2.7 billion each year. Its deal with the NBA expires after the 2024-25 season, and keeping that package will require a significant increase in rights fees.
For much of its existence since it was founded in 1979, ESPN had appeared immune to some of the troubling trends in media. But over the past decade, with cable subscriptions falling, the network has had several rounds of layoffs, including 2015 and 2017, when a number of well-known journalists and commentators were let go, including Doug Glanville, Trent Dilfer and Danny Kanell. Since then, more high-profile TV and radio personalities have not signed new contracts, among them Kenny Mayne, Trey Wingo and Mike Golic.
Despite the belt-tightening, ESPN still has found money to pay top stars. It lured Joe Buck and Troy Aikman away from Fox Sports to be its “Monday Night Football” broadcast booth for last season with combined salaries of more than $30 million annually. Those are just some of the latest examples of its leading contributors earning escalating salaries, while those not deemed core to the company’s business have been considered more expendable.
One executive included in Monday’s cuts was ESPN’s second-longest tenured employee, Mike Soltys, a 43-year veteran of the company and a vice president of communications.