Big Changes Are Resulted From Bob Iger’s Return to Disney
As evidenced by his first financial report, Bob Iger’s recent return to Walt Disney Co. has brought about fresh adjustments for the corporation. Layoffs, corporate reorganization, and an effort to reestablish the entertainment company’s dividend are all indicated in the report, which was positively greeted by Wall Street.
Bringing back the Magic?
Many on Wall Street were eagerly awaiting Iger’s comeback in November and believed he would be as successful as Steve Jobs was upon his return to Apple Computer in 1997. Activist investor Nelson Peltz of Trian Partners, who wants a seat on the board and contends that Disney has to enhance cost discipline, properly plan for succession, and reinstate its dividend, has criticized the firm, though.
Cost-Shaving Measures
In the report released on Wednesday, Iger announced 7,000 layoffs as well as a reorganization strategy that will result in the creation of three key businesses and a $5.5 billion cost reduction. Iger also said that he would advise the board to reinstate the dividend, even if it would be little. Despite this, the adjustments appear to have pleased investors, as Disney’s shares increased by 5.4% in after-hours trade.
Theme parks and streaming
The direct-to-consumer streaming industry recorded a sizable operational loss of $1 billion. Disney’s theme parks, meanwhile, made $3.05 billion in operating profit. Iger acknowledged that, like firms like Intel and Meta Platforms, the cost-cutting measures will make it viable to pay for the dividend.
Boardroom conflict
Even if some of Peltz’s demands have been granted, Disney is still opposed to having him join the board and in its most recent proxy filing Disney encouraged shareholders not to vote for Trian Group representatives. Iger has also admitted that the firm’s pricing and advertising strategies may have been overly aggressive. It is unclear if Peltz would concede, but if he does, Iger could reconsider going back to the Magic Kingdom.