The news: Disney is preparing to lay off thousands of employees as it asks managers to target 20% in annual cost savings, Bloomberg reported on Monday. Cost savings may also come from broader expense reductions.

Behind the layoffs: This is one of multiple rounds of layoffs this year at Disney. The company announced in April that it was considering cutting up to 1,000 employees, mainly targeting its marketing teams. It also stated it would cut around 300 additional employees in September.

The need for cost savings could point to the financial pressure that legacy media companies are facing in the shift to streaming-first viewing habits.

Cutting costs is increasingly a necessity if these companies want to remain competitive with digital platforms as linear revenues decline.

• Consumers increasingly prefer streaming over traditional TV models. Over-the-top (OTT) video is now the dominant format for TV-style viewership. Our forecast shows that sub OTT and YouTube far exceed traditional pay TV in viewership, and that gap continues to widen.