Disney execs fumed after Chapek hired McKinsey for restructuring plan: report

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by Jacob Solomon Dec 2, 2022 News
Disney execs fumed after Chapek hired McKinsey for restructuring plan: report

According to a new report, McKinsey was brought in by the ousted Disney CEO to control major spending decisions.

The firm was hired two months before the CEO was let go.

According to The Wall Street Journal, discussions to implement McKinsey's plans were underway in the weeks leading up to the board of director's decision to replace him with Bob Iger.

Disney CFO Christine McCarthy told the board that she had lost confidence in the leadership after the company posted a disappointing earnings report.

During his two-year tenure as CEO, he racked up a host of PR gaffes, but he also shifted a lot of the decision-making related to content to his lieutenant.

General views of Sleeping Beauty Castle at Disneyland
Disney reportedly hired consulting firm McKinsey to reorganize the company, rankling creative execs at the media giant.
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McKinsey suggested centralization in order to eliminate redundant workers at the media giant. One possible change would be to centralize marketing and publicity for films and TV shows in another part of the company. Some tasks were suggested to be consolidated by McKinsey.

According to the Journal, some of Disney's top content chiefs were still reeling from losing power over spending decisions under the previous administration. The changes would strip them of nearly all of their power, according to sources.

bob iger
Disney’s board brought back longtime CEO Bob Iger, after the firm’s CFO said she lost confidence in Chapek.
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Iger was able to reverse the moves of the man. Disney's creators were given the power to make decisions over content when Daniel was fired.

In a memo to employees last week, Iger said that he intended to restructure the company in a way that honors and respects creativity.

At a town hall meeting on Monday, Iger said that building a new corporate structure would take time and that it would be done in conjunction with other executives.

bob chapek
During his short time as CEO, Bob Chapek centralized decision-making for content marking and distribution under Kareem Daniel, taking away power from the company’s longtime creative chiefs.
Bloomberg via Getty Images

Disney's hiring freeze will stay in place as the CEO looks at the company's cost structure. Iger isn't sure if he will use McKinsey suggestions. Requests for comment were not returned.

Iger said he would focus more on building the profitability of Disney's streaming division.

The streaming unit lost over a billion dollars in the last quarter. When he relinquished the CEO reins two years ago, Iger said Disney should focus on boosting profitability and less on adding new subscribers.