Disney is no longer the happiest place on earth, as Disney’s hiring freeze remains in place. Disney has had a hiring freeze in effect since November 1st, according to a leaked memo from the entertainment giant’s former CEO Bob Chapek. At the time the memo was released, Chapek also “expected some staff reductions.”
On November 20th of this year, Disney announced suddenly that they would abruptly oust former CEO Bob Chapek, and replace him with Bob Iger, who has come out of retirement to lead the company for the next two years, while Disney tries to name a more permanent successor. This comes in the wake of several senior executives telling board members that they lost confidence in Chapek’s leadership.
During his first town hall, Iger decided the hiring freeze that Chapek enacted would remain in place as he reassess’ the cost structure.
In just one year, Disney’s stock is down by 33%. Despite revenue being up for all theme parks across the board, Disney still underperformed analysts’ expectations. In early November, Disney stock closed at $86.75 a share, the lowest price since March 2020, when Disney stock fell to just $85.76 a share, due to closing the parks during the height of the COVID-19 pandemic.
Disney also raised the price of admission to their theme parks, which makes sense since the theme parks represent a majority of their profits, for now. Until December 8th of this year, the single-day price at any given Disney park was $109, and going forward only the Animal Kingdom park will keep this price. Now, the lowest price for admission in any other park is $124, and can get up to $189, depending on the time of year.
While Disney’s streaming service, Disney+ is growing, it is also seeing losses. Disney reported a loss for their streaming of $1.47 billion. In the last quarter, which ended October 1, 2022. Revenue for Disney’s linear television networks (broadcast and pay tv) dropped by 5% last quarter. Before his sudden departure, Chapek stated that he expected the losses for Disney+ to narrow and Disney+ will see profitability, “assuming we don’t see a meaningful shift in the economic climate in the coming years”.
Iger stated that he wanted to take strides to make the streaming platform profitable, not just gain subscribers. Iger, who had been a key player in major acquisitions at Disney in years prior, including the acquisitions of Pixar and Lucasfilms, stated that there will be no new acquisitions for the foreseeable future.
In a memo last week, Iger stated his first order of business will be to redo Disney’s organizational structure. Under former CEO Chapek, Disney’s structure was centralized decision-making over content and distribution which was all centralized under Kareem Daniel, former chairperson of Disney Media and Entertainment Distribution. In a town hall, Iger stated he fired Daniel and is working on a new structure, that will take some time to implement. All decisions will be made in conjunction with other Disney executives including; chairman of general entertainment content Dana Walden, Disney Studios head Alan Bergman, ESPN president Jimmy Pitaro, and CFO Christine McCarthy.
While the exact future of Disney remains uncertain, Iger said it best. He wouldn’t come back to Disney if Disney’s future wasn’t bright.