Restructuring at Disney: 7,000 layoffs and loss of subscribers at Disney+ for the first time in its history

disney faces a phase of change Bob Iger, who returned to the company as CEO last November, presented the board of investors with a new reconstruction plan to alleviate some of the problems the brand is dragging on. After several disappointing box office releases, a loss of 2.4 million Disney+ subscribers in the fourth quarter of 2023 (the company’s first reported decline in users of the platform), and the removal of former CEO Bob Chapek, the Iger administration motion to redirect the future of the company: “This reorganization will result in a more cost-effective, coordinated and streamlined approach to our operations”Iger said.

The first measure, and the most controversial, is the layoff of 7,000 employees, equivalent to 3.2% of its worldwide workforce. This decision is intended to save $5.5 billion, according to Variety. Iger justified the controversial decision as follows: “We are committed to running our businesses as efficiently as possible, especially in a challenging economic environment. […] To help achieve this, we will reduce our workforce by approximately 7,000 jobs.”. However, the manager did not want to miss the opportunity to enhance the positions that are being eliminated: “While this is necessary to meet the challenges we face today, I do not make this decision lightly. I have enormous respect and appreciation for the talent and dedication of our employees around the world. I am aware of the personal impact of these changes. “Iger clarified.

One of the issues that the new administration wants to leave well underpinned is that of content. Disney announced new sequels of familiar characters (‘Frozen: The Ice Kingdom’, ‘Zootopia’ and ‘Toy Story’). Unlike Chapek, Iger wants to carry New stories from old hits: “We are embarking on a significant transformation that will maximize the potential of our creative teams, brands and once-in-a-lifetime franchises”says Iger, referring to established Disney characters.

Iger was already the CEO of Disney. Perhaps this is where his attachment to past films comes from. His goal is clear in his reunion with his position: “Embrace more authority to our creative leaders, hold them accountable for content financial performance”in the words of Iger himself. “We believe the work we are doing to reshape our company around creativity, while reducing expenses, will lead to sustained growth and profitability for our business”Add.

Another of the ideas considered during the investment meeting was the possibility of implementation ads on the streaming platform. However, this hypothesis has been ruled out for now, having only been tested in the United States. Disney + with advertising would not produce “significant financial impact” as reported by Disney chief financial officer Christine McCarthy.

Reorganization of the company into three areas

Disney as a company not only covers audiovisual content, but other products and industries as well. Iger’s new plan also includes the reorganization of the company in three business lines: Disney Entertainment, ESPN and Parks, Experiences and Products. Disney Entertainment is the heart of Disney’s productions. This is the business segment that deals with contents and their dissemination, where Iger intends to bring the heart of the company. The second of the companies is its sports broadcasting channel, ESPN. With this new restructuring, ESPN and ESPN+ distance themselves from Disney Entertainment and its itinerary. The last of the tributaries of this river called Disney is called Disney Parks, Experiences and Products. As the name indicates, it deals with the management of theme parks, cruises, merchandising, etc.

Disney Entertainment will be led by Dana Walden and Alan Bergman. ESPN will continue to be directed by Jimmy Pitaro. The Disney Parks, Experiences and Products will be under the direction of Josh D’Amaro.