Walt Disney Co on Wednesday announced a sweeping restructuring under recently reinstated CEO Bob Iger, slashing 7,000 jobs in an effort to save $5.5 billion in costs and make its streaming business profitable.

The layoffs account for an estimated 3.6% of Disney’s global workforce of around 220,000 people it employed as of October 1. According to an SEC filing, it employs 166,000 in the US and around 54,000 internationally.

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The Disney stock surged 4.7% to $117.22 in after-hours trading. The measures, including a promise to reinstate a dividend for shareholders, addressed some of the criticism from activist investor Nelson Peltz that the Mouse House was overspending on streaming.

With the plan to reduce costs and return power to creative executives, the company will restructure into three segments: an entertainment unit that encompasses film, television, and streaming, a sports-focused ESPN unit, and Disney parks, experiences, and products.

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During its quarterly earnings call with investors, Disney announced it would be slashing $5.5 billion in costs, which will be made up of $3 billion from content, excluding sports, and the remaining $2.5 billion from non-content cuts.

“We will take a very hard look at the cost of everything we make across television and film,” CEO Bob Iger said on a call with investors Wednesday.

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The sweeping job cuts were announced by Iger after the company released better-than-expected financial results for the fourth quarter of 2022. Disney’s revenue in the quarter surged 8% to $23.5 billion, beating estimates of $23.4 billion from analysts surveyed by Refinitiv.

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Large media companies such as Warner Bros. Discovery, have been cutting content spending and looking to make streaming businesses profitable. Increasing competition has led to slowing subscriber growth, and companies have been looking to find new sources of revenue growth. Some companies, like Disney+ and Netflix, have added cheaper, ad-supported options.