Disney plans job cuts and hiring freeze, CEO Bob Chapek says in memo

Disney Leaders-

As we start fiscal 2023, I would like to speak with you directly about the associated fee management efforts Christine McCarthy and I referenced on this week’s earnings call. These efforts will help us to each achieve the vital goal of reaching profitability for Disney+ in fiscal 2024 and make us a more efficient and nimble company overall. This work is going on against a backdrop of economic uncertainty that each one corporations and our industry are contending with.

While certain macroeconomic aspects are out of our control, meeting these goals requires all of us to proceed doing our part to administer the things we will control—most notably, our costs. You all could have critical roles to play on this effort, and as senior leaders, I do know you’re going to get it done.

To be clear, I’m confident in our ability to succeed in the targets we’ve got set, and on this management team to get us there.

To assist guide us on this journey, I even have established a value structure taskforce of executive officers: our CFO, Christine McCarthy and General Counsel, Horacio Gutierrez. Together with me, this team will make the critical big picture decisions vital to attain our objectives.

We are usually not starting this work from scratch and have already set several next steps—which I wanted you to listen to about directly from me.

First, we’ve got undertaken a rigorous review of the corporate’s content and marketing spending working with our content leaders and their teams. While we won’t sacrifice quality or the strength of our unrivaled synergy machine, we must ensure our investments are each efficient and are available with tangible advantages to each audiences and the corporate.

Second, we’re limiting headcount additions through a targeted hiring freeze. Hiring for the small subset of essentially the most critical, business-driving positions will proceed, but all other roles are on hold. Your segment leaders and HR teams have more specific details on how this may apply to your teams.

Third, we’re reviewing our SG&A costs and have determined that there may be room for improved efficiency—in addition to a chance to remodel the organization to be more nimble. The taskforce will drive this work in partnership with segment teams to attain each savings and organizational enhancements. As we work through this evaluation process, we’ll take a look at every avenue of operations and labor to search out savings, and we do anticipate some staff reductions as a part of this review. Within the immediate term, business travel should now be limited to essential trips only. In-person work sessions or offsites requiring travel will need advance approval and review from a member of your executive team (i.e., direct report of the segment chairman or corporate executive officer). As much as possible, these meetings ought to be conducted virtually. Attendance at conferences and other external events will even be restricted and require approvals from a member of your executive team.

Our transformation is designed to make sure we thrive not only today, but well into the longer term—and you may hear more from our taskforce within the weeks and months ahead.

I’m fully aware this might be a difficult process for a lot of you and your teams. We’re going to need to make tough and uncomfortable decisions. But that’s just what leadership requires, and I thanks upfront for stepping up during this vital time. Our company has weathered many challenges during our 100-year history, and I even have little doubt we’ll achieve our goals and create a more nimble company higher suited to the environment of tomorrow.

Thanks again in your leadership.

-Bob