Disney’s Bob Chapek orders hiring freeze, cost cuts to make Disney+ profitable in 2021 by John P. Johnson
A day before Disney’s earnings call, CEO Bob Chapek ordered a freeze on new hires at the company, in order to make Disney+, its direct rival to Disney+, profitable in 2021.
The first part of the company’s earnings release on Wednesday detailed Chapek’s decision, which he announced in an interview with Recode’s Kara Swisher as part of a livestream event.
“The company will take a pause in hiring to ensure we have adequate time to develop Hulu’s first-of-its-kind service for our fans,” Chapek said.
The new Disney+ will launch in 2021, after Disney and Comcast’s proposed merger is approved. It will cost $6.99 per month and offer subscribers access to original programming, including “Peanuts” and original series from the Disney Channel and the Marvel universe.
Chapek’s decision to freeze hiring comes amid a broader corporate attempt to reduce costs. About two weeks after Disney announced its new direct competition to Disney+, on Sept. 24, the company said it was preparing to take a $500 million charge to its $11 billion in net assets, as announced in its 2018 annual report.
“As we continue to implement the company’s strategic initiatives and reduce expenses, we believe we will be better positioned to deliver higher-quality entertainment at a lower cost,” Disney CEO Bob Iger said at the time.
The company has been increasing its investments in original content this year, with the announcement of new live-action, animated, and live-action/animated series, as well as content from Disney’s Pixar and Marvel films (not including Disney+ itself).
The company said Wednesday that it expects the new direct competitor to be profitable in 2021.
Here’s a look at how Disney’s direct competitor stacks up to Disney+ so far, according to Disney CEO Bob Iger’s notes at the company’s earnings call on Wednesday afternoon