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Returning Disney CEO Iger retains hiring freeze, prioritises profitability

Disney CEO Bob Iger has told staff the hiring freeze implemented earlier this month by his predecessor Bob Chapek will remain in place as he looks at the company’s cost structure.

Bob Iger

In a town hall address, which took place a little over a week after his surprise return as CEO was confirmed, Iger said instead of chasing subscribers with “aggressive marketing and aggressive spend on content, we have to start chasing profitability.”

Iger’s return and Chapek’s departure have taken place against a backdrop of turbulence at the Mouse House.

In terms of streaming subscriptions, Disney+ has performed well, gaining more than 12 million subs in the most recent quarter to reach 164.2 million. Across its entire streaming portfolio, the company now has 235.7 million.

But while the subscriber additions have been plentiful, Wall Street has become increasingly sceptical over the economics of streaming, especially as many companies, Disney included, rack up big losses as they expand their international content pipelines. The stock price has also fallen from US$156 per share at the start of the year to around US$96 on Monday.

That is, ultimately, what cost Chapek his job. The ousted CEO had taken measures to address Disney’s economic struggles with a “targeted” hiring freeze and the creation of a “cost structure taskforce” following its most recent earnings miss.

It was too late, however, and the board decided to bring Iger back on a two-year term, with one of his major goals being to find a long-term successor.

The road to profitability will not be a simple one, Iger told employees. “In order to achieve that, we have to take a very, very hard look at our cost structure across our businesses.”

Since his return, Iger has wasted no time in shaking things up and beginning the process of undoing some of the things Chapek put in place.

While the hiring freeze will remain as Iger looks at costs, Iger’s return has already resulted in the departure of one of Chapek’s top lieutenants, Kareem Daniel, head of Disney Media & Entertainment Distribution, who left the company last week.

During the town hall, Iger also dismissed suggestions that a takeover or merger deal with tech giant Apple could be on the long-term roadmap as “pure speculation.”

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