Disneyland prides itself on being "the happiest place on Earth." However, when former CEO Bob Chapek was at the helm, those working at The Walt Disney Company DIS may not have felt like they belonged to a company worthy of such a tagline.
What Happened: Disney surprised investors, analysts and fans when it recently announced that it replaced Chapek with former CEO Bob Iger. The move may have been in part to company unrest caused by a restructuring proposal.
A new report highlights how Chapek and Disney Chief Financial Officer Christine McCarthy hired consulting firm McKinsey & Co to help get spending under control for the media giant.
The move was supported by the company’s board of directors, according to the Wall Street Journal.
McKinsey's suggested changes included changing marketing spending controls and not having studio executives in charge of marketing spending. This led to a significant uproar at the company.
The firm also advised Disney to consolidate divisions, including legal services, hiring and communications.
Why It’s Important: McKinsey's plans divided Disney's leadership. Since taking over as CEO in 2020, Chapek had already changed the company’s divisional structure and pushed through changes that upset many.
Iger, since taking over as CEO once again, has suggested giving more control to the creative content team at Disney.
"It is my intention to restructure things in a way that honors and respects creativity as the heart and soul of who we are,” Iger told Disney employees last week.
Iger, expected to push through several restructuring changes for the company, faces a tough act of balancing investor demands and cutting costs, while also appeasing employees and disgruntled fans.
Iger previously led Disney as CEO for 15 years and was well respected by employees and investors, thanks to sizable stock market returns.
DIS Price Action: Disney shares closed up 1% to $98.65 on Thursday.
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