While there are obvious benefits to the Disney and 21st Century Fox deal, there are also some significant negatives, which comes in the form of job losses.
When major companies are acquired or merge together layoffs aren't typically far behind, and that will probably also be the case with Disney and 20th Century Fox. BTIG analyst Rich Greenfield believes those losses will be incredibly significant, eyeing a number in the 5,000 to 10,000 range (via Deadline).
“Disney expects over $2 billion in synergies from the Fox acquisition, with the overwhelming majority of that from cost-savings–meaning job cuts,” Greenfield wrote. While the expected reduction of film releases is itself a form of job shrinkage, more significant layoffs are on the horizon. “In order to reduce costs by upwards of $2 billion, we believe Disney will need to cut well-over 5,000 jobs and the number could easily swell toward 10,000 given the high degree of overlap between the two companies around the world.”
Fox's Rupert Murdoch seemed to signal layoffs are coming as well in a company-wide memo released yesterday. "We are deeply committed to finding opportunities for our people as well as ensuring that anyone impacted is well taken care of,” Murdoch wrote.
Now, these layoffs probably won't happen in the near future, due to the deal between Disney and Fox not even reaching regulatory approval until 2019, while full integration of the companies isn't expected until sometime in 2021. Still, it isn't a comforting thought, no matter how far away it is.
Murdoch shared his initial thoughts on the deal in the official announcement and seems to be excited about what the future holds.0comments
“We are extremely proud of all that we have built at 21st Century Fox, and I firmly believe that this combination with Disney will unlock even more value for shareholders as the new Disney continues to set the pace in what is an exciting and dynamic industry,” Murdoch said. “Furthermore, I’m convinced that this combination, under Bob Iger’s leadership, will be one of the greatest companies in the world. I’m grateful and encouraged that Bob has agreed to stay on, and is committed to succeeding with a combined team that is second to none.”
You can read more about the landmark deal here.