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Disney layoffs hit Disney+ executive team as Bob Iger resets streaming strategy




Disney ( DIS ) ended a long week of laying off thousands more workers as it looks to cut 7,000 jobs by the summer.

The eliminations occurred across the company’s business segments, including Disney Entertainment, ESPN and Disney Parks, Experiences and Products. However, reports point to a significant number of cuts at Disney+ as Disney CEO Bob Iger attempts to reset the streaming giant and reconcile costs.

According to Bloomberg, Jerrell Jimerson, Sean Curtis and Jaya Kolhatkar, senior executives in product, technology and data within the streaming division, were let go. Marketing and business development teams were also affected. Disney did not immediately respond to Yahoo Finance̵[ads1]7;s request for comment.

Taken together, these recent cuts, along with those made in the past, represent a major shift for the streaming division’s future — all initiated by Bob Iger.

Disney layoffs hit Disney+ executive team as Bob Iger resets streaming strategy

NEW YORK, NY – NOVEMBER 27: (L to R) CEO and Chairman of The Walt Disney Company Bob Iger and Mickey Mouse look on before ringing the opening bell at the New York Stock Exchange (NYSE), November 27, 2017 in New York City. Disney marks the company’s 60th anniversary as a listed company on the NYSE. (Drew Angerer/Getty Images)

Iger, who stepped back as CEO in November, has been hyper-focused on profitability even as investors shift their focus away from subscriber growth and place more emphasis on margins. The company’s direct-to-consumer division, which includes Disney+, Hulu and ESPN+, squandered a whopping $4 billion-plus in the 2022 fiscal year that ended Oct. 1, after spending an estimated $33 billion on content last year.

Since then, Iger has worked hard to establish new revenue streams like Disney’s recently launched ad-supported tier, as well as various price increases to help cut losses.

In the most recent quarter, the streaming loss narrowed to $1.1 billion in Q1 from $1.5 billion in Q4 — ahead of the company’s previous guidance. Nevertheless, losses increased compared to the same period last year, when losses directly to consumers amounted to 593 million dollars.

Iger confirmed the company’s outlook to reach streaming profitability by the year 2024.

The power change

Iger had championed the debut of Disney+ in November 2019 — a time when Wall Street still had a “growth at any cost” mentality toward streaming as more companies began weighing their own direct-to-consumer plans in the face of Netflix’s overwhelming success.

Disney+ proved to be a strong streaming player right out of the gate, with 10 million users signing up for the service on its first day. At the time, it seemed the early success of Disney+ would cement Iger’s legacy when he handed the company over to then-CEO Bob Chapek in early 2020, which ultimately led to its own set of unforeseen challenges.

Under Chapek’s leadership, Disney was overhauled to focus mainly on streaming as COVID-19 changed the theater industry and drastically changed consumer behavior.

However, this shift set off a firestorm of PR headaches as Chapek’s tenure quickly became riddled with controversy – from political battles and A-list talent issues to contentious reorganizations and the ever-looming shadow of Iger, who even spoke out against some of Chapek’s decisions.

Along with his shaky image, Chapek also had to deal with a falling stock price as investors began to panic that streaming would never turn a profit, regardless of how many subscribers signed up.

Shares fell roughly 45% in 2022, marking the worst annual stock performance for the company since 1974.

Iger presses the reset button

Immediately after returning as CEO, Iger made his first major move – firing Kareem Daniel and restructuring Disney’s Media and Entertainment Distribution (DMED), which oversaw Disney’s streaming services and was responsible for the distribution, marketing and monetization of content globally. DMED was one of Chapek’s first major swings as CEO, but the reorganization was categorized as a controversial move that upset longtime veterans and reportedly “confused” workers.

Disney’s streaming services, ad sales division and linear TV networks, along with broadcast, cable and international syndication.

Disney announced other key leadership changes in its streaming division, announcing Hulu president Joe Earley as the new president of direct-to-consumer for Disney Entertainment, replacing 6-year veteran Michael Paull, another Chapek go-to.

As Bloomberg pointed out, Disney held an investor day in December 2020 to present its streaming and programming initiatives. Six of the first seven executives who spoke at the event are no longer with the company.

Photo by: Dennis Van Tine/STAR MAX/IPx3/13/17Bob Iger at the premiere of

Photo by: Dennis Van Tine/STAR MAX/IPx3/13/17Bob Iger at the premiere of “Beauty And The Beast” in New York City.

Iger’s streaming reset comes as the executive has emphasized a direct link between content decisions and financial performance, particularly amid a challenging macroeconomic environment that has pressured other media giants — such as Warner Bros. Discovery (WBD) and Paramount Global (PARA) – to adopt their own cost-cutting measures.

“This is a time of enormous change and challenge in our industry,” he wrote in an internal memo at the time of DMED’s restructuring. “Our work will also focus on creating a more efficient and cost-effective structure.”

The executive has since kept that promise, restructuring the organization into three core business segments: Disney Entertainment, ESPN and Disney Parks, Experiences and Products.

The company will break out these segments for the first time next month when it reports quarterly earnings on May 10.

Alexandra Canal is a senior reporter at Yahoo Finance. Follow her on Twitter @alliecanal8193 and email her at alexandra.canal@yahoofinance.com

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