The Walt Disney Company has been restructured once again under the leadership of CEO Bob Iger. Iger shared the new plan that is effective immediately on an earnings call, the first since his return to the role of CEO.
The announcement of the new structure came as no surprise. It has been in the works since shortly after Iger’s return in November. It also is the third restructuring for the company in the last fiver years. Initially in 2018, Iger refocused the company on streaming. Then former CEO Bob Chapek changed things again to create the company in his vision by splitting business decisions from creative efforts. Iger reversed the decision made by Chapek and said moving forward there would be a focus on creativity and those who are creative would be held accountable. It also is part of the company’s efforts to be more efficient and cut costs by $5.5 billion.
“Our company is fueled by storytelling and creativity, and virtually every dollar we earn, every transaction, every interaction with our consumers, emanates from something creative,” Iger said Wednesday. “I have always believed that the best way to spur great creativity is to make sure the people who are managing the creative processes feel empowered.”
“This reorganization will result in a more cost-effective, co-ordinated approach to our operations,” Iger told analysts on a conference call. “We are committed to running efficiently, especially in a challenging environment.”
The new organization of the company will be divided into three segments:
- Disney Entertainment
- ESPN
- Disney Parks, Experiences and Products
Disney Entertainment will be led by Dana Walden and Alan Bergman. ESPN Chairman Jimmy Pitaro will continue to lead ESPN. Josh D’Amaro, the current Chairman of Disney Parks, Experiences and Products will continue to lead the segment.
Iger also said on the call that the company would “focus even more on our core brands and franchises” and “aggressively curate our general entertainment content.” This includes being more sequels for several animated franchises. He said that ESPN’s future will continue to be at the house of mouse. He confirmed that “We’re not engaged in any conversations or considering a spinoff of ESPN.” He did say the move was considered “in my absence,” and it was determined to not be a good move for Disney.
Along with cost cutting through its different segments, Disney also announced that it will be cutting 7,000 jobs. $3 billion of the cost cuts will come from content, excluding sports, and the remaining $2.5 billion from non-content cuts. After the earnings call, Disney stock went up by 5%.
The call is the last financial call before Disney’s annual shareholder meeting. At this shareholder meeting, Mark Parker is expected to assume the role of Chairman of the Board for The Walt Disney Company. Parker also is heading up the committee to work on the succession plan for Disney after Iger’s contract is up after 2 years.
What do you think about these three new segments for The Walt Disney Company? Is this a good way to restructure the company? Share your thoughts and opinions in the comments below!
