Disney CEO Bob Chapek Confirms Company Undertaking Massive Cost-Cutting Measures In Wake Of Poor Q4 Financial Report
Jacob Smith
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After months of denying the realities of living in a recession, entertainment giant The Walt Disney Company is expected to make massive layoffs due to their poor financial outlook.
Source: Avengers: Infinity War (2018), Marvel Entertainment
As per a memo sent to top company execs last Friday and subsequently viewed by Variety, the House of Mouse will begin taking substantial measures to offset the company’s recent and abysmal Q4 financial losses.
Source: Kingdom Hearts III (2019), Square Enix
“While certain macroeconomic factors are out of our control, meeting these goals requires all of us to continue doing our part to manage the things we can control—most notably, our costs,” wrote Chapek to his fellow executives. “You all will have critical roles to play in this effort, and as senior leaders, I know you will get it done.”
To accomplish these goals, the CEO announced that he had “established a cost structure taskforce of executive officers: our CFO, Christine McCarthy and General Counsel, Horacio Gutierrez.”
“Along with me, this team will make the critical big picture decisions necessary to achieve our objectives,” he declared.
Letitia Wright as Shuri in Marvel Studios’ Black Panther: Wakanda Forever. Photo courtesy of Marvel Studios. © 2022 MARVEL.
The measures set to be undertaken by this task force include “a rigorous review of the company’s content and marketing spending working with our content leaders and their teams,” which seeks to “ensure our investments are both efficient and come with tangible benefits to both audiences and the company,” “limiting of headcount additions through a targeted hiring freeze,” and “reviewing our SG&A costs.”
(L-R): Hayden Christensen (Anakin Skywalker) and Obi-Wan Kenobi (Ewan McGregor) in a scene from Lucasfilm’s OBI-WAN KENOBI, exclusively on Disney+. © 2022 Lucasfilm Ltd. & ™. All Rights Reserved.
“As we work through this [Selling, general, and administrative expenses] evaluation process, we will look at every avenue of operations and labor to find savings, and we do anticipate some staff reductions as part of this review,” the CEO added, before more definitively informing his team that “In the immediate term, business travel should now be limited to essential trips only.”
Source: Spider-Man: No Way Home (2021), Marvel Entertainment
“I am fully aware this will be a difficult process for many of you and your teams,” acknowledged Chapek. “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.”
“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,” he concluded.
LOS ANGELES, CALIFORNIA – JUNE 23: (L-R) Natalie Portman and Bob Chapek, Chief Executive Officer of Disney attend the Thor: Love and Thunder World Premiere at the El Capitan Theatre in [Hollywood], California on June 23, 2022. (Photo by Charley Gallay/Getty Images for Disney)
This year, production spending for the Marvel Cinematic Universe hit an all-time high with both both Thor: Love & Thunder as well as Black Panther: Wakanda Forever hitting $250 million in costs before marketing – the highest such budgets for a non-Avengers film in the entire franchise.
Source: Thor: Love and Thunder (2022), Marvel Entertainment
The massive costs of the film have driven Marvel Studios’ average break-even mark for those films to be an estimated $700-800 million dollars.
But while Disney had a much better year at the box office compared to 2021, none of their three Marvel Cinematic Universe releases for 2022 managed – the aforementioned two as well as Doctor Strange in the Multiverse of Madness – to hit a billion dollars worldwide.
Source: Dr. Strange in the Multiverse of Madness (2022), Marvel Entertainment
Further, the news of Disney’s upcoming cost-cutting measures comes immediately after the company posted a poor quarterly earnings result for Q4 2022.
Notably, the Mouse reported that the quarter starting in July and ending on Oct. 1st had seen the company lose $1.47 billion on their streaming endeavors – roughly $800 million more than they had lost in the same period last year.
Angela Bassett as Ramonda in Marvel Studios’ BLACK PANTHER: WAKANDA FOREVER. Photo by Annette Brown. © 2022 MARVEL.
Further, Disney’s premium and broadcast television networks saw a 5% loss for the quarter.
As a result of these abysmal earnings, Disney’s stock price has tumbled 38% from its January high of $158 to a measly $94 – its lowest price in more than two years.
Source: Avengers: Infinity War (2018), Marvel Entertainment
This slow but steady stock crash has coincided with Disney’s quadrupling down on woke content, particularly in regards to their “not-at-all-secret agenda” of putting gay and queer content in programs targeted at children.
In the wake of Florida’s Parental Rights in Education bill that bans the teaching of sexual orientation and gender identity to K-3 students, Disney’s internal LGBTQ lobby has made “representation” a priority for all future projects by The Walt Disney Corporation.
Source: Baymax! (2022), Walt Disney Animation Studios
Disney made LGBTQ representation a primary focus in the marketing of both Thor: Love and Thunder and Lightyear.
And while the former film’s gay content ultimately amounted to a ‘blink-and-you’ll-miss-it’ confirmation that Korg was married to a man due to his species being all-male, the latter’s was put front and center at every conversation concerning the Toy Story spin-off.
Source: Lightyear (2022), Disney
“Lightyear’s queer staff, including animators and editors, shepherd the character to get it right,” said director Angus MacLane during an interview with The LA Times earlier this year. “There’s a lot of really fantastic representation that means a lot more than I can understand. For them to be so excited about that and have it be so personal, it means a lot to me.”
However, for a multitude of reasons including the company’s virtue signaling around the children’s film’s inclusion of LGBT content, the film bombed at the worldwide box office, with its production ultimately losing Disney upwards of $100 million.
Source: Lightyear (2022), Disney
When grilled about the aggressively progressive direction of his company during a recent appearance on The Wall Street Journals’ “money, business, and power”-centric podcast, The Journal, Chapek denied that the company had become “too woke”, instead affirming that Disney “wants our content to reflect the rich, diverse world that we live in.”
Producer Kevin Feige and Bob Chapek attend the Doctor Strange in the Multiverse of Madness World Premiere at the Dolby Theatre in Hollywood, CA on Monday, May 2, 2022.
(photo: Alex J. Berliner/ABImages)
“I guess that’s another way of saying, ‘Catering to your audience,’” he continued. “But the world is a rich, diverse place and we want our content to reflect that. And we’re so blessed to have the greatest content creators and they see it similarly.”
While Chapek has claimed his company doesn’t have an ideological bent, Brian Schwartz of CNBC recently reported that according to data from the nonpartisan political money watchdog organization
LOS ANGELES, CALIFORNIA – JUNE 29: (L-R) Chairman of Disney Studios Content Alan Bergman, President of Marketing at Disney Studios Content Asad Ayaz, Producer, President of Marvel Studios and Chief Creative Officer of Marvel Kevin Feige, and CEO of The Walt Disney Company Bob Chapek attend the Black Widow World Premiere Fan Event at Dolby Theatre on June 29, 2021 in Los Angeles, California. (Photo by Alberto E. Rodriguez/Getty Images for Disney)
OpenSecrets, of the combined $900,000 donated to federal candidates in the 2022 midterms partly by Disney’s personal PAC and nistky its individual employees, 87% of these donations went to Democrat candidates.
Source: She-Hulk: Attorney at Law Season 1 Episode 9 “Whose Show Is This?” (2022), Marvel Entertainment
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