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Layoffs looming at ABC as Disney aims to cut 10 percent of costs

Key Points
  • Disney is targeting cuts of 10 percent from annual costs of its ABC television group.
  • The media giant is seeking to make jobs reductions through attrition, a source told CNBC.
  • Shares of Disney are down 2 percent this year.
CEO of the Walt Disney Company, Bob Iger.
Michael Kovac | Getty Images

Disney is attempting to cut 10 percent a year from its costs, a move that may bring layoffs after a summer of bad box office numbers and struggling ratings.

The media giant is targeting the cuts in its ABC television group, a source familiar with the changes told CNBC. Disney has yet to finalize plans regarding staffing levels but the company is seeking to make reductions by attrition, the source said.

Disney is expected to identify those cuts by the end of September.

Cuts are anticipated to take place throughout subdivisons of the ABC television group, according to The Wall Street Journal. Disney plans to make reductions at ABC's broadcast network, news, television production studio and local stations.

Disney stock price reflects the company's recent lackluster performance, down 2 percent this year at $102 per share, after hitting a 52-week high of $115.84 on April 2, according to FactSet.

In conversations with CNBC, several high-level executives at large media companies have expressed frustration and anger with Disney CEO Bob Iger's decision, announced on Aug. 8, to create two direct-to-consumer offerings.

Disney plans to remove its movies from the popular streaming service Netflix beginning in 2019 and start its own. Next year, ESPN's streaming service kicks off, with content from 10,000 sporting events.

Iger's response to the criticism has been: "Any intellectual property company should be careful about being lulled into supporting a platform that may not serve the customer effectively in a disrupted world."