The Walt Disney Company on Wednesday announced that it would be laying off 7,000 employees as part of a restructuring effort to cut the entertainment giant’s costs. 

Disney CEO Bob Iger revealed the news in his first earnings report since re-taking the reigns of the company this past November. The 7,000 eliminated employees will account for four percent of Disney’s global workforce, The New York Times reported. 

“While this is necessary to address the challenges we’re facing today, I do not make this decision lightly,” Iger said in a statement, adding that he has “enormous respect and appreciation for the talent and dedication of our employees worldwide, and I’m mindful of the personal impact of these changes.”

The layoffs are part of a new plan unveiled by Disney to massively restructure the company, in a move to save at least $5.5 billion in operational costs. The new structure will contain three divisions: Disney Entertainment, which will contain the company’s film and television assets, including the flagship streaming service Disney+; Parks, Experiences, and Products, which will oversee the company’s consumer space and theme parks; and ESPN, which will include the eponymous sports network as well as EPSN+. 

Iger said during Wednesday’s earnings calls that the restructuring was “aimed at returning greater authority to our creative leaders and making them accountable for how their content performs financially,” according to The Hollywood Reporter.

While the earnings report showed that the company’s revenue rose eight percent in the last quarter, to $23.5 billion, the report also revealed that Disney+ lost 2.4 million subscribers worldwide and still remains unprofitable. 

Accordingly, executives are cognizant that Disney+ has an uphill battle, with Variety reporting that CFO Christine McCarthy said the streaming service will not have a “meaningful financial impact” until later in 2023.