CEO Bob Iger recently said in a company-wide email that Disney employees must return to working in the office at least four days a week.
Following the pandemic, many executives across industries have been winding down remote work policies as they reckon with declines in productivity and stress the importance of in-person collaboration.
The internal memo obtained by CNBC states:
“As I’ve been meeting with teams throughout the company over the past few months, I’ve been reminded of the tremendous value in being together with the people you work with. As you’ve heard me say many times, creativity is the heart and soul of who we are and what we do at Disney. And in a creative business like ours, nothing can replace the ability to connect, observe, and create with peers that comes from being physically together, nor the opportunity to grow professionally by learning from leaders and mentors.”
During the pandemic, many companies opted for a fully remote or hybrid work model to prevent large gatherings of people. As the pandemic subsided, companies sought a more normalized, pre-pandemic office environment.
Many companies have stuck to a hybrid model with a more even split between days at home versus in the office. Disney is opting to have employees in the office most of the time.
“Iger’s four-day-per-week stipulation is relatively strict compared with other large companies, which have opted for two or three mandated in-office days for hybrid employees. Apple mandated employees return to work three days a week in September. Twitter owner Elon Musk, who has famously slept as his companies’ facilities as a show of commitment, ordered nearly all Twitter employees to return to the office five days a week in November.”
Disney’s new policy comes shortly after Iger returned to the executive position in the company in an effort to improve growth and profitability. Iger resumed leadership of Disney in November of last year, just as former CEO Bob Chapek had planned a massive cost-cutting campaign.
NPR reported on Iger’s return:
“Disney announced in November that Iger would be stepping back into his role as CEO. He was first CEO from 2005 to 2020, and then served as the executive chairman and board chairman before retiring in December 2021.”
Disney has been burdened with exorbitant expenses from its streaming service Disney+. Furthermore, the legacy media landscape is extremely dynamic as many consumers are ditching cable for streaming. This is changing the way revenue is earned as ad revenue lessens.
Iger’s plan is to reorganize Disney’s Media and Entertainment Distribution division, which is responsible for the company’s content and subsequent distribution. He has also maintained a hiring freeze implemented by Chapek before his departure, as a cost-cutting measure while Disney undergoes reorganization. This will also give budget allocations back to those who are engaging in creative projects, which could possible drive more revenue for the company.
Ultimately, Iger has a tall order to fill. Disney has experienced significant underperformance over the past year. Disney shares have fallen approximately 40 percent where the company has lost market value of around $174 billion.
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