Disney’s Iger says more job cuts ahead after Fox deal
Disney’s chief executive said that the company has only just started making global layoffs as it works to incorporate its newly acquired assets from 21st Century Fox.
Bob Iger, the chairman and CEO of the Walt Disney Company, added that the job cuts are necessary to generate beneficial synergies, an industry term referring to the impact a business tip-up can have on profits or revenues.
In this case, Disney’s executives have forecast about $2 billion in cost saving synergies as the combined company cuts business segments or employees that were duplicated through the Fox acquisition.
“We’re just beginning a consolidation process across the world. And we’ve been candid about that with people in the organization,” Iger told CNBC’s David Faber on Thursday. “There’s work to do to get to the synergies that we talked about, which were cost synergies. We have consolidation ahead of us.”
Asked explicitly whether there are more job cuts to come, Iger answered in the affirmative.
“We’re very early into this process and I’ve never second guessed decisions that we’ve made. And I’m certainly not going to second guess this one, not at this point anyway,” he added.
Iger told that his conversations with Fox’s Rupert Murdoch that ultimately led to the $71 billion deal were based on on the launch of Disney+.
The chief executive’s sit-down with CNBC came just after Iger and other Disney leaders unveiled Disney+, the company’s forthcoming direct-to-consumer offering. The streaming service is set for launch on Nov. 12 and will cost $6.99 per month or $69.99 per year.
Iger also confirmed at the company’s investor day on Thursday that he will step down in 2021.
“I’m expecting my contract to expire at the end of 2021,” Iger said during Disney’s investor day presentations. “And I was going to say ‘and this time I mean it,’ but I’ve said it before.”
Iger has postponed his contract with Disney twice during his tenure and has made a successful Disney+ a priority in his last few years at the head of the company.
“The most important thing is that the company get through the transition seamlessly,” Iger told CNBC. “I believe that two-and-a-half years from now, or roughly two years after we’ve launched this massive initiative, the company — it will be well on its way.”
“That will be the right time for a transition at the CEO level. The Fox acquisition will have been assimilated. We will be off and running on the direct-to-consumer space,” he added.