Disney’s Bob Iger is planning to lay off 7,000 employees in a ‘significant transformation’ to cut back costs as he eliminates some of his predecessor’s efforts.
On Wednesday, Iger announced his plans to restructure the company, effectively eliminating the Disney Media and Entertainment Distribution group set up under former CEO Bob Chapek.
The new structure, according to the , will have only three divisions, Disney Entertainment — which will include film and TV assets as well as Disney+; ESPN — which will include ESPN and ESPN+; and Parks, Experiences and Products — which will include theme parks and the consumer products team.
As part of that changeup, eVdEn EvE NaKLiyAT Disney will cut 7,000 jobs — representing a little over three percent of its global workforce.If you beloved this article and you would like to receive a lot more info with regards to evDen Eve nAkLiYaT kindly check out our own web site. The cuts are likely to predominantly affect the entertainment and ESPN divisions, despite the company beating analyst’s expectations for the fourth quarter of 2022.
The changeup comes as Gov.Ron DeSantis and the company faces a proxy battle with an activist investor seeking to gain a seat on the board.
Disney CEO Bob Iger is planning to lay off some 7,000 employees as he restructures the company
In announcing the new structure Wednesday, Iger likened it to changes he made at the media giant in 2005, when he first became CEO, and in 2016, when Disney announced a shift to streaming as it bolstered its assets with the acquisition of 21st Century Fox.
‘Our new structure is aimed at returning greater authority to our creative leaders and making them accountable for how their content performs financially,’ he said on an earnings call.
‘Our former structure severed that link and must be restored,’ he continued, noting: ‘Moving forward, our creative teams will determine what content we’re making, how it’s distributed and monetized and how it gets marketed.’
Under the plans, Alex Bergman and Dana Walden will co-chair the Disney Entertainment division, with Jimmy Pitaro continuing to lead ESPN and Josh D’Amaro continuing to lead parks and experiences.
And, in addition to the planned layoffs, Disney CFO Christine McCarthy also said the company is targeting $5.5billion in cost savings, including $3billion related to future content savings with the remaining $2.5billion coming from existing marketing, staffing and technology costs.
But the move comes as Disney beat earnings expectations.
The company announced on Wednesday that it earned $1.28billion, or 70 cents per share, in the three months through December 31, up from a net income of $1.1billion, or 60 cents per share a year earlier.
Excluding one-time items, Disney earned 99 cents per share.Analysts, on average, were expecting adjusted earnings of 78 cents per share, according to FactSet.
In total, revenue grew eight percent to $23.51 billion from $21.82 billion a year earlier. Analysts were expecting revenue of just $23.44 billion.
The company also said Disney+ ended the quarter with 161.8million subscribers, down one percent since October 1, while Hulu and ESPN+ each posted a two percent increase in paid subscribers.
Following the news, shares of Disney rose three percent in after-hours trading.
Much of the layoffs are expected to be in the entertainment division, which includes Disney+, as well as ESPN, which includes ESPN+
Disney ended the fourth quarter of 2022 with $1.28billion, eVDeN EvE NakLiYAt or 70 cents per share
Disney shares ticked upwards following the earnings call on Wednesday
But Disney has been under fire recently by billionaire investor Nelson Peltz, who has claimed Iger is not fit to lead the company, citing falling revenues.
Last week, Peltz — the founder of Trian Management — sent a letter to Disney shareholders on Thursday asking them to vote for him rather than longtime board member Michael BG Froman.
Trying to win over the shareholders, Peltz — who is worth $1.4billion and currently owns 0.5 percent of Disney through his firm Trian Partners — writes that ‘earnings per share have declined an astounding 50 percent since 2019 because costs have ballooned, even as Disney generated 41 percent more in revenue.’
At the same time, he said, the share price has plummeted 44 percent in 2022.
‘For a company with so many advantages — unparalleled consumer loyalty and access, valuable intellectual property, renowned brands, an enviable library of content and a talented and engaged workforce — it is disappointing and simply unacceptable that shareholders have suffered so much,’ he said.
‘We cannot sit idly by,’ the letter continues. ‘And we hope you will not either.
‘If shareholders like us and you remain passive, without demanding more accountability and an ownership mentality in the boardroom, why shouldn’t we expect the stock to do anything other than fall back to another eight-year-low?
‘As the owners of this great company, we must act,’ it says, before touting Peltz’s work at other companies including Unilever, Procter & Gamble and Wendy’s.
‘Nelson is prepared to ask the hard questions at Disney and pursue excellence in strategy, leadership, culture and performance,’ the letter continues, claiming: ‘Disney’s executives and directors do not want Nelson in the boardroom.
‘Based on our experience, we believe they don’t want to be challenged, answer hard questions or have robust debates. They prefer the status quo.
‘But shareholders need someone in the boardroom who is experienced enough, committed enough and objective enough to insist that Disney live up to its full potential,’ the letter concludes.
‘The current Disney directors wake up with challenging day jobs: building cars, selling clothing, processing credit card transactions, sequencing genes. All important things.
‘But these accomplished directors are busy, and we believe they cannot possibly focus sufficiently on Disney to ensure that 2023 and 2024 are nothing like 2022. If they could, 2022 would not have been like 2022.’
The letter then goes in for the kill — asking shareholders to vote for him and withhold votes for Froman.
‘As an experienced outsider and independent voice, Nelson Peltz will seek to work with the rest of the Disney board to have Disney use its famed imagination to create a better tomorrow for Disney shareholders.
‘Together, we can Restore the Magic.’
Billionaire investor Nelson Peltz (pictured in October) sent an open letter to Disney shareholders last week in his ongoing efforts to get a seat on the board
In response to the letter, Disney issued a statement saying: ‘The Disney Board of Directors is focused on delivering long-term sustainable value and continually works to ensure it is comprised of the right mix of experience, skills and perspectives to guide Disney, particularly as it navigates this dynamic period.
‘The Disney Board of Directors does not endorse Nelson Peltz (or his son Matthew, who is running as an alternate Mr. Peltz may swap in) as a nominee, and believes the election of either Mr. Peltz or his son would threaten the strategic management of Disney during a period of important change in the media landscape.
‘Inexplicably, Trian seeks to replace Michael Froman, a highly valued member of the Board with deep background in global trade and international business, who the Board believes is far better qualified than either Mr. Peltz or his son to help drive value for shareholders,’ the executives said in an email to DailyMail.com.
‘Neither Mr. Peltz nor his son offer skills or experience additive to the Disney Board that replace the decades-long experience of Mr. Froman.’
The company also sent out its own letter to shareholders urging them not to vote for Peltz.
It says: ‘Your Board is committed to delivering sustainable, superior shareholder value. Over the last several years, we have focused on ensuring that the Board has the right combination of experience, skills and perspectives to guide Disney through a period of unprecedented change in the media business.’
The letter noted that Parker will become the chairman of the board following the 2023 shareholder meeting and says: ‘ Your Board does not endorse Mr. Peltz (or his son) as a nominee and believes that his election would threaten our efforts to manage Disney for all shareholders.
‘Over more than six months of engagement with Mr. Peltz, in both conversations and written materials, he has demonstrated that he does not understand Disney’s businesses and he lacks the perspective and experience to contribute to the objective of delivering shareholder value in a rapidly shifting media ecosystem.’
The letter concludes: ‘We look forward to providing you with more information regarding the Board and management team’s strategy to deliver shareholder value in today’s rapidly shifting media ecosystem and the reasons why the election of Mr. Peltz will not benefit that plan.
‘In the interim, we strongly urge you to simply discard and NOT to vote using any blue proxy card sent to you by the Trian Group. Please wait to vote until you can do so on a fully informed basis.’
Florida Gov. Ron DeSantis announced on Monday he is seizing control of Disney’s special tax district