Bob Iger

Source: Disney

Bob Iger

FEBRUARY 9 UPDATE: 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. “I don’t make these decisions lightly,” he said in Wednesday’s first quarter 2023 earnings webcast.

The CEO signalled broad structural changes ahead on his first day back last November. Having just replaced Bob Chapek and returned to the fray since stepping down as CEO in February 2020, Iger fired Kareem Daniel, who led the now defunct Disney Media & Entertainment Distribution and was a key Chapek ally.

Now he has gone further with a reorganisation which, as he said back in November, “honours and respects creativity as the heart and soul of who we are”. 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. Iger and CFO Christine McCarthy reaffirmed the guidance that Disney+ remains on course to reach profitability by the end of fiscal 2024.

Iger said Disney would no longer provide long-term subscriber guidance but emphasised the priority was growth and profitability. “We’re going to continue to go after subs but [we’ll] be more judicious about that. We’re going to look at costs,” Iger said. 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.

The CEO said sequels were in the works on Toy Story, 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 said a succession planning committee is in place. His latest term as CEO lasts two years.

On Thursday activist shareholder Nelson Peltz said he was satisfied with the proposed restructure and was ending his bid for a seat on the board.

Disney’s virtual annual shareholder meeting will take place on April 3.