In his first earnings call since returning as Disney’s CEO, Bob Iger delivered a shocker with his announcement of plans to cut $5.5B in costs through a sweeping reorganization including layoffs of 7,000 employees.
It was a dramatic turn away from the course set by his predecessor Bob Chapek, who had pursued an “all-in” strategy to sign up subscribers to the company’s streaming channels. Unfortunately, Chapek’s low-price bundles to entice new users wound up ballooning the company’s losses to $1.5B in the fourth quarter alone, leading to Chapek’s ouster and Iger’s return.
With that backdrop, Iger was under intense pressure to spell out his plans to right the ship, including a very public campaign from activist investor Nelson Peltz who is angling for a seat on the company’s board of directors.
In addition to the internal cost-cutting, Iger has also floated the possibility of selling its ESPN and Hulu divisions. He stated that “restructuring will return creativity to the center of the company,” which many have interpreted as a move to refocus the Disney brand on its studios and feature films. Creative executives within the studio divisions have lobbied to have more theatrical releases, representing the premiere showcase for their work.
Disney will be “leaning into their unrivaled brands,” announcing upcoming sequels for TOY STORY, FROZEN, and ZOOTOPIA, all of which have an established track record as $1B+ box office earners. Exhibitors are delighted with Iger’s new direction, signaling a pivot back to theatrical release.
See also: ‘Toy Story,’ ‘Frozen’ and ‘Zootopia’ Sequels in the Works, Says Bob Iger (Hollywood Reporter)
