Bob Iger Announces Disney’s Restructuring Plan and Cost Savings
Bob Iger, the CEO of The Walt Disney Company, announced a massive restructuring of the world’s largest entertainment company on Wednesday.[0] The new plan includes cutting 7,000 jobs and making $5.5 billion in cost savings. The reorganization will divide the company into three core businesses: Disney Entertainment, ESPN and Disney Parks, Experiences and Products.[1]
The cuts come as part of a cost-cutting effort also announced Wednesday.[2] Bob Iger mentioned that the company is striving to achieve $5.5 billion in cost savings, with $2.5 billion of it being from activities unrelated to content production, including films and television programs. [3]
According to Iger, these decisions would enable the corporation to become more financially efficient, organized, and efficient. “This reorganization will result in a more cost-effective, coordinated and streamlined approach to our operations,” he said. “I do not make this decision lightly.”[3]
Iger stated that the company is aiming for a total of $5.5 billion in cost savings. A total of $3 billion in reductions will be made to content (not including sports), and $2.5 billion will be taken from non-content areas, he added.[4]
Alan Bergman and Dana Walden have been appointed to serve as Co-Chairs of Disney Entertainment, covering the vast array of entertainment media and content businesses that the company has worldwide, including its streaming services.[5] [6] Bob Iger has revealed that a new Avatar experience is being introduced to Disneyland, as well as sequels to Toy Story, Frozen, and Zootopia.[7]
After the announcement of cost cutting and the return of the dividend, Disney's shares rose 8% in after-hours trading.[8] Disney stock has fallen 43% since 2022, but has seen a 22% increase since the announcement of Iger's return in November. This is higher than the market average, but lower than the growth of other media companies such as Netflix and Warner Bros. in the same period.[2] Discovery owns CNN.[2]
Disney announced that they will be introducing a $5 charge.[9]
0. “Disney Will Layoff 7,000 Employees to Save $5 Billion in Costs” Entrepreneur, 9 Feb. 2023, https://www.entrepreneur.com/business-news/disney-will-layoff-7000-employees-to-save-5-billion-in/444635
1. “Five Things You Need to Know to Start Your Day” Bloomberg, 8 Feb. 2023, https://www.bloomberg.com/news/newsletters/2023-02-08/five-things-you-need-to-know-to-start-your-day-ldwb37nf
2. “Disney plans to cut 7,000 jobs and reward shareholders” WSVN 7News | Miami News, Weather, Sports | Fort Lauderdale, 8 Feb. 2023, https://wsvn.com/entertainment/disney-plans-to-cut-7000-jobs-and-reward-shareholders
3. “Disney planning to cut 7K jobs across the company, CEO says” WESH 2 Orlando, 8 Feb. 2023, https://www.wesh.com/article/disney-job-cuts/42805389
4. “Disney loses 2.4M subscribers on its streaming service, will layoff 7K workers” Marca English, 9 Feb. 2023, https://www.marca.com/en/lifestyle/us-news/2023/02/09/63e481fae2704efaba8b45c9.html
5. “Disney CEO Bob Iger announces 7,000 layoffs, reorg” Business Insider, 8 Feb. 2023, https://www.businessinsider.com/disney-layoffs-7000-jobs-to-be-cut-2023-2
6. “Disney Reorganizes Into Three Segments, Entertainment, ESPN & Parks” Deadline, 8 Feb. 2023, https://deadline.com/2023/02/disney-reorganizes-three-segments-entertainment-espn-parks-1235253253/
7. “Capital Expenditures at Disney's domestic theme parks to be cut by 700 million dollars” wdwmagic.com, 8 Feb. 2023, https://www.wdwmagic.com/other/walt-disney-company/news/08feb2023-capital-expenditures-at-disneys-domestic-theme-parks-to-be-cut.htm
8. “Disney to lay off 7,000 workers, cut $5.5 billion worth of costs in latest reshuffle” Yahoo Money, 8 Feb. 2023, https://money.yahoo.com/disney-to-lay-off-7000-workers-cut-55-billion-worth-of-costs-in-latest-reshuffle-220217075.html
9. “Disney Plans to Reinstate Its Dividend and Cut 7,000 Jobs. The Stock Jumps.” Barron's, 8 Feb. 2023, https://www.barrons.com/articles/walt-disney-earnings-stock-price-51675811282
