The Walt Disney Company has had another bad week.
First, on Tuesday, Florida Gov. Ron DeSantis (R) won re-election in a landslide victory. Then, sending its stock crashing to new lows, Disney’s corporate earnings reportedly disappointed Wall Street. Now, they are reportedly planning, a hiring freeze, targeted layoffs, and austerity measures throughout the company. At this point is unclear how many workers Disney will lay-off, and which particular areas of the company they will come from.
Disney CEO, Bob Chapek, in a letter to top company executives, obtained by multiple news outlets, said the austerity measures will be “difficult” but necessary. Chapek wrote-
“I am fully aware this will be a difficult process for many of you and your teams. We are going to have to make tough and uncomfortable decisions. But that is just what leadership requires, and I thank you in advance for stepping up during this important time,” adding…
“Our company has weathered many challenges during our 100-year history, and I have no doubt we will achieve our goals and create a more-nimble company better suited to the environment of tomorrow.”
-Bob Chapek, Disney CEO
According to Chapek, Disney will also be conducting a “rigorous review” of the company’s marketing and content spending, with the efforts of their newly formed “cost structure taskforce”, comprised of Chapek, CFO Christina McCarthy, and their general counsel Horacio Gutierrez.
After the company reported fiscal fourth-quarter earnings, that fell short of expectations, putting the company’s future profitability into question, Disney shares fell markedly. As it seeks to build out Disney+ and Hulu, in an effort to compete with Netflix and other competitors, Disney had revealed that it lost a stunning $1.5 billion on its streaming entertainment services. In fact, shares of Disney are down a stunning 62 percent, so far this year.
Earlier in the year, Disney, caving to pressure from a small group of radicalized employees, picked a political fight with Florida Gov. DeSantis, over the state’s Parental Rights in Education Law, which prohibits the teaching of sexuality and gender ideology, including transgenderism, to children in kindergarten through third grade. Chapek, who had condemned the law, pledging that Disney would embrace radical LGBTQ activism going forward, lost big.
Disney’s corporate free fall, began soon after, with additional losses in their autonomy in the state of Florida, who had for decades left them to govern themselves. Now Disney will be subject to vastly increased oversight and billions in taxes, all resulting from playing politics, instead of sticking to their primary job of entertainment.
Losing the confidence, of the parents who bring their families to their theme parks (i.e. consumers) and those, who for decades, had held Disney in a place of honor in their homes, as where to go for family entertainment – Disney is being shut off and tuned out. Their stock price is evidence of their bad corporate choice.
When the voices of a few, become the mantra of the many, especially in opposition to the very parents who you market to – there are bound to be consequences. In it’s restructuring, perhaps Disney will re-think the pandering it has done to be acceptable to the few, and consider its ultimate purpose in entertainment once again. Time will tell.
“Justice means minding one’s own business and not meddling with other men’s concerns.”
-Plato