Bob Iger, in his first earnings presentation that regressed to the company, announced that Walt Disney Co. will send 7.000 employees as part of an extra effort to raise $5.500 billion in costs.
Disney needs to control costs and increase profits in the media that will continue to dine on online streaming negotiations, including Disney+ and Star+. “After a strong first quarter, we are embarking on a significant transformation, which will maximize the potential of our global creative teams, new brands and franchises,” Iger said in a press release.
“We believe that the work we are doing to reshape our company is about creativity, while reducing expenses, and driving sustained growth to monetize our broadcast business. Our company is positioning itself to face future global economic disruptions and challenges, and deliver value to our shareholders.”
The Disney+ streaming service lost 2,4 million subscribers during the first quarter, where it had a total of 235 million users on Disney's streaming apps (Disney+, Hulu and ESPN+). These numbers show that Disney's streaming business continued to lose cash, adding more than $XNUMX billion in losses during the three months ending in December.
Nonetheless, Disney reported earnings and revenue that beat Wall Street estimates. The company generated sales of $23.500 billion, 8% more than the previous quarter.
Analysts had expected $23,4 billion in contributions. Disney's profit was $1.280 billion, 11% more. Shares of the entertainment giant were priced at 99 cents a share, beating plans for 78 cents, gaining 2% in after-hours trading.
Disney's latest earnings report turned out to be a pivotal moment for the company. Then-CEO Bob Chapek gleefully broke the news of a sharp increase in subscribers at Disney+, but that masked the underlying problems: disappointing profits, even at the mighty theme parks, and severe losses at the company's streaming business.
During the quarter, the loss of a staggering 1500 billion dollars. Chapek was abruptly fired in November by the board of directors, reintroducing Iger to lead the company for the next two years.
war at disney
While Wall Street and employees welcomed Iger's reversal, sobering up the table are significant challenges, including the need to generate profits from the broadcast, a deal Iger had enthusiastically championed.
The announcement of the layoffs was expected because Disney needs to deduct costs in the coming months. Iger has also imposed a mandatory return-to-work policy, which requires hybrid employees to be in the office four days a week.
About Iger arise influential investors concerned with the development of the business.
Billionaire investor Nelson Peltz, of the Peltz investment fund, Trian Fund Management, has a $900 million stake in Disney and has been lobbying the company for a seat on its board of directors because he believes it is necessary to plan for "self-inflicted" injuries. , including the poorly planned succession and acquisition of 21st Century Fox.
Peltz's proposals have been heard by other investors and, if his offer to serve on the board of directors is rejected, they are intended to encourage shareholders to vote for him (or his son Matthew). The board of directors has been campaigning heavily against Peltz, accusing him of being out of his depth when it comes to the media and entertainment business.
Disney recently named former Nike CEO Mark Parker as its first chairman, who will oversee a planning committee to meet Iger's replacement. During Iger's first 15 years as CEO, he delayed his retirement several times and it was he who chose Chapek as his successor, a decision he soon regretted.
Parker replaced Susan Arnold, who retired after serving on the board for the past 15 years. The fight will come to a head in early April when Disney virtually holds its annual shareholder meeting, at which investors will vote for the 11-member board of directors currently run by Disney.
