TechnologyDisney executives are "nervous and anxious", they say: they are already preparing for layoffs that could amount to thousands of people

Disney executives are “nervous and anxious”, they say: they are already preparing for layoffs that could amount to thousands of people

Disney employees expect layoffs as Bob Iger, recently returned to run the company, scrambles to cut costs.

In a letter to shareholders on Thursday, February 2, Disney’s board of directors wrote that it is “monitoring the important strategic changes our CEO Bob Iger is making, such as putting more decision-making power in creative teams, apply a cost reduction plan, give priority to the profitability of the streaming and improve the experience of visitors in our parks“.

Disney has not yet outlined the parameters of that cost-cutting plan, but in a November memo on the hiring freeze, then-CEO Bob Chapek had warned staff that the company “I would look at all avenues of operations and labor to find savings, and we anticipate some headcount reductions as part of this review.”

A person close to Disney assures that the internal expectation is “that they are going to cut thousands of people”adding that the next quarter should see write-offs and cost cuts to cover content losses and severance pay.

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“Senior executives are nervous and anxious”, has shared this source. “These people have already been through this in 2001, when the recession hit and Disney laid people off.”

Internally, there is speculation that Disney will focus on layoffs of people who work on non-premium digital products, says an insider. The metaverse team led by Mike White to come up with the new generation of narrative is also considered vulnerable because its value is far from being realized.

Up to 3 sources close to the company assure that the executives of DMED (Disney Media Entertainment Distribution) were gathered to discuss their jobs.

Iger is expected to dismantle the division formerly known as DMED and return control of profit and loss to creative leaders. DMED President Kareem Daniel has already stepped down, but Iger’s next move could affect 9 executives who led under Danielincluding Michael Paull, whose title is the president of direct to consumer.

A Disney executive says there is speculation that head of ad sales Rita Ferro will now report to CFO Christine McCarthy, and what role will go to Disney General Entertainment Chairman Dana Walden and ESPN and Sports Content Chairman Jimmy Pitaro.

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Iger previously commissioned McCarthy, Pitaro, Walden and Alan Bergman, President of Content for Disney Studios, to develop “the design of a new structure that returns more decision-making power to our creative teams and streamlines costs”the CEO wrote in a November note to Disney staff.

Disney’s last major round of layoffs came in 2020, during the pandemic, when the company laid off some 32,000 workers and Iger took a pay cut. According to its annual report, published in October 2022, Disney has some 220,000 employees, which is 30,000 more than the previous year.

“We expect Iger to get the right word about prioritizing DTC (direct-to-consumer) profitability over subscriber growth and cost savings in linear business on the earnings call,” Evercore ISI media analyst Vijay Jayant wrote in a note for investors of the weekend. “Cost cuts on a scale similar to those that nbcu is targeting 2023 could translate into $1.3 billion in savings over the next few years“, He suggested.

A Disney spokesman declined to comment.

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