Walt Disney Co. announces global restructuring and staff cuts

With the global entertainment and theme parks company reporting disappointing profits in its latest financial quarter earnings, Walt Disney Co. Chief Executive, Bob Iger has revealed plans to simplify the business’ operations, cut US$5.5 billion in costs and reduce 7,000 jobs from its global workforce of around 220,000 employees.

Iger also advised that the company would be reorganising into three divisions - a Parks, Experiences and Products unit, an ESPN division and Disney Entertainment.

The move, described by CNBC as “the most significant action” Iger has taken since returning to the company as Chief Executive in November last year, follows about US$1 billion in cost cutting was already underway in the last quarter.

It said 50% of the cost savings would come from marketing expenses, 30% from workforce savings and 20% of the cost savings would come from less spending on technology, procurement and other expenses.

The staff cuts will see about 3% of the roughly 220,000 people it employed as of October last year, with around 166,000 employees in the USA and about 54,000 internationally.

The reorganisation will see the entertainment group led by Dana Walden and Alan Bergman, who CNBC says are each considered contenders to take over for Iger in less than two years. ESPN Chairman Jimmy Pitaro will lead the ESPN segment, while Josh D’Amaro, will remains as the head of Disney’s Parks, Experiences and Products segment.

Commenting on the changes and the importance of the company’s creative teams, Iger said they would put more “decision-making back in the hands of our creative teams and rationalise costs”.

Iger added “our company is fuelled by storytelling and creativity, and virtually every dollar we earn, every transaction, every interaction with our consumers, emanates from something creative.

“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.”

Image: Bob Iger with Mickey Mouse at the Mickey's 90th Spectacular event in Los Angeles, USA in 2018. Credit: Shutterstock/Kathy Hutchins.