New leadership often means big changes, and in this era of mass layoffs, does a CEO change mean big workforce reductions are a guarantee? Recent headlines wouldn’t disprove that theory.
This week, The Wall Street Journal reported that the Walt Disney Co. plans to cut about 1,000 jobs from its 231K-strong workforce. According to the Journal, the layoffs are expected to begin in the coming months and will hit the company’s marketing function the hardest. That operation faced a significant consolidation in recent months, with entertainment, sports and experiences divisions unified for the first time under the direction of a new chief marketing and brand officer.
The news comes just a few weeks into the tenure of newly appointed CEO Josh D’Amaro, the former chair of Disney Experiences, who took the reins from longtime leader Bob Iger in March, following a years-long CEO succession drama.
Iger himself issued a wave of about 7,000 job cuts three years ago, shortly after he returned for his second stint as CEO.
Disney joins a number of other media and entertainment giants rolling out layoffs, many of which came after the appointment of new leadership. For instance, hundreds of layoffs are expected at Sony Pictures Entertainment, less than a year into the tenure of new CEO Ravi Ahuja. David Ellison became CEO of Paramount Skydance in August, and layoffs at that company began in October, affecting more than 2,000 employees, and largely attributed to the company’s merger with Skydance Media that put Ellison in the top job.
The entertainment sector isn’t alone in navigating sweeping change ushered in by new leadership. For instance, Target rolled out about 1,800 layoffs in the fall, its first major cuts in about a decade, with the news announced by new CEO Michael Fiddelke.
Change from the top
The current wave of mass layoffs dovetails with ongoing CEO churn, suggesting cyclical change is primed to continue.
A recent report from Russell Reynolds Associates found that 234 CEOs departed last year—a 16% increase from the previous year and far above the multi-year average. Apart from broad restructuring and reductions, both of which have gained steam in the age of AI, new CEO appointments usually also upend the rest of the C-suite.
In fact, executive search firm SpencerStuart reports that a new CEO appointment drives about 1.6 executive leaders to turn over, a figure that is closer to 4 when CEOs are tasked with major transformation.
That was the case earlier this year, when Fiddelke overhauled senior leadership at Target, consolidating two chief merchandising officer roles, with one departing, alongside a 23-year company vet who served as chief commercial officer.
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