Bob Iger has wasted little time making his mark less than three months into his latest stint as Disney CEO, announcing the company will operate under three core segments – Disney Entertainment, ESPN, and Disney Parks, Experiences and Products.
Iger said Disney will implement $5.5bn in cuts – of which $3bn will cover non-sports content – and has authorised approximately 7,000 job losses across the company, which is roughly 3% of the global workforce. On Wednesday’s first quarter 2023 earnings broadcast, he stated that he does not take these decisions lightly.
Iger also indicated broad structural changes in his first day back in November. Iger, who had just replaced Bob Chapek as CEO and returned to the fray in February 2020 as CEO, fired Karem Daniel, who was a key Chapek ally and led the Disney Entertainment Distribution. Iger wants content decisions and financial performance to drive streaming growth and said creative teams will determine which content to make and how it is distributed and marketed.
Alan Bergman and Dana Walden will serve as co-chairmen of Disney Entertainment, which encompasses global film and TV, and streaming. Christine McCarthy, CFO of Disney+, reiterated the guidance that Disney+ will reach profitability by fiscal 2024.
.Iger stated that Disney would no longer provide long term subscriber guidance, but stressed the importance of growth and profitability. “We will continue to pursue subs, but
will be more judicious about this. Iger stated that we will be looking at costs. Higher costs at Disney+ content and technology and Hulu were a key factor in a 78% rise resulting in the $1.1bn operating loss at the direct to consumer business.[we’ll]The CEO said sequels were in the works on
ToyStory , Frozen and Zootopia, and hailed the near-$2.2bn global success of Avatar: The Way Of Water, adding that an Avatar experience is coming to Disneyland.Disney will reinstate an initially “modest” dividend by the end of the year after suspending the shareholder payments to save on costs during Covid. Iger also stated that a succession planning committee has been established. His current term as CEO is for two years.
Iger spoke on Wednesday against the backdrop a proxy battle with activist investor Nelson Peltz. Peltz is trying to get a seat at the board. He is a founding partner in Trian Fund Management, which has approximately $1bn worth of Disney stock. Disney’s virtual annual shareholder meeting has been set for April 3.
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