Disney (DIS) finished a long week of laying off thousands of more workers as it looks to slash 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 sizable number of cuts at Disney+ as Disney chief Bob Iger attempts to reset the streaming giant and reconcile costs.
According to Bloomberg, Jerrell Jimerson, Sean Curtis and Jaya Kolhatkar, top executives within product, technology and data within the streaming division, were let go. Marketing and business development teams were also impacted. Disney did not immediately respond to Yahoo Finance’s request for comment.
Collectively, these recent cuts, along with those made in the past, represent a larger shift for the streaming division’s future — all set in motion by Bob Iger.
Iger, who stepped back into the CEO position in November, has remained hyper-focused on profitability even as investors shift focus away from subscriber growth and put more emphasis on margins. The company’s direct-to-consumer division, which includes Disney+, Hulu and ESPN+, shed a whopping $4 billion-plus in its fiscal 2022 ended Oct. 1, after it spent an estimated $33 billion on content last year.
Since that time, Iger has worked hard to establish new revenue streams like Disney’s recently launched ad-supported tier, in addition to various price increases to help pare losses.
In its latest quarter, streaming losses narrowed to $1.1 billion in Q1 from $1.5 billion in Q4 — ahead of the company’s previous guidance. Still, losses were up compared to the year-ago period when direct-to-consumer losses totaled $593 million.
Iger reaffirmed the company’s outlook of reaching streaming profitability by the year 2024.
The streaming shift
Iger had championed the debut of Disney+ in November 2019 — a time when Wall Street still held a “growth at all costs” mentality for 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 in its first very day. At the time, it seemed like the early success of Disney+ would cement Iger’s legacy as he handed the company over to then-CEO Bob Chapek in early 2020, which eventually led to its own set of unforeseen challenges.
Under Chapek’s leadership, Disney was overhauled to focus predominately on streaming as COVID-19 upended the theatrical industry and drastically shifted consumer behavior.
However, that shift set off a firestorm of PR headaches as Chapek’s tenure quickly became riddled in controversy — from political battles and A-list talent problems to contentious reorganizations and the ever-looming shadow of Iger, who even spoke out against some of Chapek’s decisions.
Coupled with his faltering image, Chapek also had to deal with a sinking stock price as investors began to panic that streaming would never turn a profit, regardless of how many subscribers signed up.
Shares slid roughly 45% in 2022, marking the worst annual stock performance for the company since 1974.
Iger hits the reset button
Immediately upon his return to the CEO position, Iger made his first big move — firing Kareem Daniel and restructuring Disney’s Media and Entertainment Distribution (DMED) division, which oversaw Disney’s streaming services and was responsible for distributing, marketing, and monetizing content globally. DMED was one of Chapek’s first big swings as chief executive, but the reorganization was categorized as a controversial move that upset longtime veterans and reportedly “confused” workers.
Disney’s streaming services, its advertising sales division, and its linear television networks, along with broadcast, cable and international syndication.
Disney announced other key leadership changes within the 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 hosted an investor day in December 2020 to tout its streaming and programming initiatives. Six of the first seven executives who spoke at the event are no longer at the company.
Iger’s streaming reset comes as the executive has stressed a direct link between content decisions and financial performance, especially amid a challenging macroeconomic environment that’s pressured other media giants — like Warner Bros. Discovery (WBD) and Paramount Global (PARA) — to enact their own cost-saving initiatives.
“This is a time of enormous change and challenges 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 up with that promise, restructuring the organization into three core business segments: Disney Entertainment, ESPN, and Disney Parks, Experiences and Products.
The company will break out those 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 [email protected]
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