Bob Igers Takes the Reins in the Big Disney Shakeup: 7,000 Layoffs, Dana Walden and Alan Bergman Take the Reins

Bob Igers Takes the Reins in the Big Disney Shakeup: 7,000 Layoffs, Dana Walden and Alan Bergman Tak ...

In his first earnings report since returning as CEO, Bob Iger announced the massive cuts Wednesday and laid out a structure that will unify virtually all of Disney's entertainment businesses under one roof.

Iger's first move is the formation of Disney Entertainment, which will encompass Disney Studios, General Entertainment, Animation, Disney+, 20th Century Studios, Searchlight, and Hulu, all under the leadership of current General Entertainment chief Dana Walden and Studios head Alan Bergman, both of whom will serve as co-chairmen under the new banner.

ESPN, which will continue to be led by James Pitaro, will be a separate entity and include ESPN+. Disney will not be spun off from the company at large, or at least not yet. A third division will be Disney Parks, Experiences, and Products, which will continue to exist, as well as gaming and publishing. The new structure is effective immediately.

DMED, or Disney Media & Entertainment Distribution, was created by former CEO Bob Chapek and led by Chapek's longtime lieutenant Kareem Daniel. DMED had oversight of everything from ad sales for Disney content and Disney+, to distribution, operations, and technology, and called the shots on how content was distributed, removing power from the storytellers.

DMED's workforce is expected to be significantly affected by the 7,000 layoffs, but layoffs might also impact all of its entertainment divisions.

Iger said the reorganization is critical to ensure the richness of Disney's storytelling and creativity, but it's also designed to hold the new group accountable for the content's financial performance. The new group will monitor the content Disney produces, distributed, and monetized, and will monitor how it's promoted.

Following the news, Disney's stock is up roughly 10% in after-market trading.

The Walt Disney Company's headquarters is in Burbank, CA.

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Analysts anticipate a reorganization once Iger returns to the fold. Disney+ reported $1.5 billion in operating losses in Q4; it's also unclear if Iger might terminate his subscription to Comcast; and it's unclear if Iger might terminate his plans to sell the company.

Nelson Peltz, the CEO of Trian Management, has been lobbied for a board seat for months, according to Disney's board. Last week he urged current board member Michael B.G. Froman to vote him on the board, saying he "lacks a basic understanding of our industry by his own admission." Trian has been clinging to larger-picture changes in media since his last meeting.

The way Florida lawmakers want to handle the management of the Walt Disney World resort in Orlando, which resurfaced this week after Republicans in the state legislature proposed a change to Disney's self-governance status.

Disney beat analyst expectations and increased revenues in the direct-to-consumer segment to $5.3 billion, but lost 2.4 million Disney+ subscribers across the world and suffered additional $1.05 billion in losses in the direct-to-consumer division for the quarter. Subscriber losses stemmed from the loss of 3.8 million subscribers from Disney+ Hotstar in India and parts of Southeast Asia after the streamer lost rights to IPL cricket.