Disney said Wednesday it plans to restructure into three divisions.
The media and entertainment giant said it will now consist of three divisions:
Disney Entertainment, which includes most of its streaming and media operations
An ESPN division that includes TV networks and streaming services
A park, experience and product unit
The move marks Bob Iger’s most significant move since returning to the company as CEO in November. Disney announced the changes minutes after posting its latest quarterly earnings.
n Wednesday during its quarterly earnings call with investors, Disney also announced. It would cut $5.5 billion in costs, with $3 billion coming from content. Excluding games, and the remaining $2.5 billion from non-content cuts.
Disney also said it would cut 7,000 jobs from its workforce. That would be about 3% of the roughly 220,0000 people employed as of Oct. 1, about 166,000 in the . U.S. and about 54,000 , according to SEC filings.
Disney stock rose more than 5% in after-market trading.
Media companies, such as Warner Bros. Discovery is lagging behind in content spending and looking to . Make their streaming businesses profitable. Heightened competition . Has slowed customer growth, and companies are looking for. New ways to increase revenue. Some, like Disney+ and Netflix, have added cheaper, ad-supported options.
“We’re going to look very hard at . Pricing everything we do across television and film,” Iger said on a . Call with investors on Wednesday.
Restructuring has been underway since . Iger returned to the helm of Disney, replacing his hand-picked successor, Bob Chapek.
The entertainment group will be led by top lieutenants Dana Walden and Alan Bergman. Each considered a contender to take over for Iger in less than two years. ESPN Chairman Jimmy Pittaro will lead the ESPN segment. While Josh D’Maro, Disney’s head of parks, experiences and products, will be in control.
The future of ESPN under Disney ownership has been a question for investors for some time. Last year, activist investor Third Point called on the company to spin out ESPN. Disney and Third Point later reached an agreement over ESPN’s future thinking.
Chapek’s removal came shortly after . Disney reported its fiscal fourth-quarter earnings. Disappointing in profit and some key revenue segments. Chapek also warned that Disney’s strong streaming numbers will decline in the future. He then told employees that Disney would cut . Costs through hiring freezes, layoffs and other measures.
Shortly after his return, Iger sent a memo to employees announcing . That the business would be restructured, particularly the Disney Media and Entertainment unit. The immediate restructuring meant. The departure of Karim Daniel. Head of the company’s previous media and entertainment unit. And right-hand man Chapek.
Iger said he would put more . Decision-making back into our creative team’s hands and rationalize costs” at the time. According to , the goal will be to build a new structure in the coming months, keeping elements of the DMED. He added during a town hall that he would not lift . The company’s hiring freeze as it reassessed Disney’s cost structure.
On Wednesday, Iger again echoed . Those comments about giving control back to creative minds at the company.
“Our company is driven by storytelling and creativity. And every dollar we earn, every transaction. Every interaction with our customers stems from something creative. Iger said Wednesday. “I’ve always believed that . The best way to encourage great creativity is to make sure that. The people who are driving the creative processes feel empowered.”
