Disney’s Chapek orders cost cutting to ensure Disney+ hits 2024 targets

After months of painful restructuring at Warner Bros Discovery, and the announcement that social media platform Meta is to cull 11,000 staff, now it’s the turn of Disney staffers to fear for their jobs. In an email sent out on Friday, Disney CEO Bob Chapek primed senior executives for a widespread “cost management” programme that will involve budget cuts, headcount reduction and a recruitment freeze.

Just last week, Chapek presented a bullish outlook for the growth of streaming platform Disney+. But markets were rattled by the scale of the company’s losses as it sinks billions into its pivot towards direct to consumer services. In his email, Chapek referenced the “economic uncertainty that all companies and our industry are contending with”. Cost cutting will, he said, “help us to both achieve the important goal of reaching profitability for Disney+ in fiscal 2024 and make us a more efficient and nimble company overall.” Presumably, failure to achieve profitability for Disney+ in 2024, will trigger the kind of mauling Netflix has received from the markets in 2022.

To oversee the cost-cutting exercise, Chapek has created a “cost structure task force” made up of himself, CFO Christine McCarthy and general counsel Horacio Gutierrez. As a priority, he said there would be “a rigorous review of the company’s content and marketing spending working with our content leaders and their teams.” On recruitment, he said, “hiring for the small subset of the most critical, business-driving positions will continue, but all other roles are on hold.” Business travel is to be severely restricted, which perhaps has implications for content markets, and there will be staff reductions.

Underlining the potential fallout, Chapek said: “We are going to have to make tough and uncomfortable decisions. But that is just what leadership requires. Our company has weathered many challenges, and I have no doubt we will achieve our goals and create a more nimble company better suited to the environment of tomorrow.”