Bob Iger, CEO of Disney, has unveiled his first sequel less than three months into his second stint at the company. On Wednesday (Feb. 8), Iger told investors that he was embarking on a third corporate revamp, with a focus on returning creativity to the center of the company, as well as restoring profitability. To achieve this, Disney will be operating under three newly named core business segments, Disney Entertainment, ESPN, and Disney Parks, Experiences and Products.
Iger also announced that the company would be tightening its belt with $5.5 billion in cuts, resulting in 7,000 layoffs and other cost-reducing measures. This restructuring is to improve the economics of the streaming business, as well as reduce expenses to improve margins and returns.
The restructuring announcement comes alongside the company’s fiscal first quarter earnings report for the three months ended Dec. 31, which saw an 8% increase in revenue, but a 7% decline in operating income. The Media and Entertainment business, which accounted for 63% of total revenue, delivered no operating income, with a $1.2 billion profit generated by the so-called Linear Networks (ABC and ESPN) almost completely erased by a $1 billion loss in the direct-to-consumer business.
In order to improve profitability and accountability, Iger said Disney will no longer be providing long-term subscriber guidance in order to move beyond an emphasis on short-term quarterly metrics. He also noted that sequels in its “Toy Story,” “Frozen” and “Zootopia” productions would be coming soon to help towards the objective.
Bob Iger, CEO of Disney, has unveiled his first sequel since returning to the company less than three months ago. In a bid to restore profitability, Iger announced $5.5 billion in cuts, resulting in 7,000 layoffs and other cost-reducing measures. The restructuring announcement comes alongside the company’s fiscal first quarter earnings report, which saw an 8% increase in revenue, but a 7% decline in operating income for the Media and Entertainment business.
In order to move beyond an emphasis on short-term quarterly metrics, Iger said Disney will no longer be providing long-term subscriber guidance. He also noted that sequels in its “Toy Story,” “Frozen” and “Zootopia” productions would be coming soon to help towards the objective of restoring profitability.
