Disney Cuts Stock Options Amid Marketing Layoffs

Disney has cut stock-based compensation for some tech employees, according to sources seen by Business Insider.

Software engineers at the company say the ceiling for their long-term incentive awards is being reduced from 35% of their base salary to 25%.

In a recording of the conversation, an unnamed director says there was "no way to sugarcoat" that this was a "reduction in your total compensation."

The compensation reduction follows widespread layoffs at Disney, announced around a month after Josh D'Amaro took over as CEO.

Competitive compensation review

According to Business Insider, the decision to reduce stock-based compensation is "totally unrelated" to performance and came after Disney leadership completed "a review of the US and Canada technology compensation market," the director shares.

Disney has used Restricted Stock Units to help retain talent, with awards often vesting in two equal instalments subject to continued employment.

By reducing this offering, Disney could be looking to ensure its hiring and compensation remains aligned with the broader technology marketplace.

In February, the Financial Times reported that Meta had reduced its annual distribution of stock options by around 5% for most of its staff, after cutting its stock award by 10% in 2025.

The decision was made following Meta's investments in AI, with the company forecasting in its 2025 earnings report that its capex costs could double in 2026.

Marketing teams face layoffs

Disney's reduction of stock options follows announcements of layoffs across the company, particularly impacting marketing, publicity and home entertainment teams.

In a company memo, Josh says the decision was made to help the company streamline operations to "ensure we deliver the world-class creativity and innovation our fans value and expect from Disney."

"Given the fast-moving pace of our industries, this requires us to constantly assess how to foster a more agile and technologically-enabled workforce to meet tomorrow's needs," he continues.

These are the first layoffs led by Josh, who took over as CEO on 18 March 2026.

Previous restructuring efforts

Former CEO Bob Iger led a major restructuring in which the company said it planned to cut around 7,000 jobs in order to save around US$5.5bn in costs and improve overall financial performance following struggling stock prices.

The company saw its stock price struggle once again earlier in 2026, following a decline in international visitors to its US theme parks and a 35% drop in operating profit for its entertainment unit due to increased marketing spend.