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Thoughts on the Town Hall Leaks (Thus Far)

November 28th was the date of the in-person and virtual town hall meeting for a all Disney Cast Members with Bob Iger, the CEO. Although, I did not attend (I’m not a Cast Member), stories of what happened on the call have started to leak out and it’s worth discussing what was said (and more importantly what wasn’t) for possible signs of things to come.

First and foremost, there was a question on the hiring freeze, which Iger seeks to maintain (he used the phrase “no current plan” to change course). That should not surprise anyone given the company finances at this point. That does not mean that critical roles will remain vacant, but it’s fair to say that if the company can go without filling a vacant position, they probably will until the financial situation improves and/or plans to restructure the company complete. This is very prudent and to be fair to Iger, is the most responsible course of action to take. The real question is how leadership defines the, “most critical, business-driving” positions. Shortages of front-line park Cast Members is a big problem that affects profitability, and it isn’t clear that they are included in the “most critical, business-driving” definition.

The next question worth discussing the is the WDI move to Lake Nona in Florida from their current location in California. With this question, Iger reportedly has not made any decisions on the matter. In fairness to Iger, it is too early in the process to say what will happen (although if I had to guess, there will be some Imagineers that remain in the current office, and others who wish to relocate to Lake Nona will be able to do so). Why? It’s simple. Real money has been spent on the relocation and there are some pretty significant HR impacts with those that left the company due to the relocation, who will be justifiably upset with the change in direction.

The next questions worth noting revolved around customer-facing issues. Specifically, diversity and inclusion in its storytelling, as well as the park reservation system. Here is where serious decisions will need to be made in the very near future, because of the impacts it has on the bottom line in a very tangible way…money in!

It shouldn’t surprise anyone that Iger reinforced his belief that diversity and inclusion are an important part of Disney’s storytelling, nor that any significant decisions about the parks got announced at an internal town hall meeting. That’s not good corporate governance if he did.

Here is what seems to be missing…a timeline. It has been a week since former CEO Bob Chapek hastily exited and Iger became the CEO. It’s a very different company than when Iger left the role, with a different Cast Member demographic and a much different, more demanding customer. Much like the Disney shareholder, both guest and Cast Member also expect results. The town hall needed to convince Cast Members that better days are ahead and that there is a light at the end of the tunnel, which I’m not sure that did. For guests, it is going to fall flat too.

Last week, I suggested that Iger needs to help Disney make money fast. That need is very real.

Strange World was a box office flop and will likely not turn a profit any time soon. It’s symbolic of where the studios as a whole are today. Taking money out of the parks is no longer an option because the parks need work and that involves capital expenditure. Although it is not a big surprise very little has been said about the parks over the past week, things need to happen in the near future if they hope to salvage 2023 revenues. With very little in the way of new attractions, a looming recession, and high prices, guests are going to cancel existing reservations or not make any new ones.

For attendance at the parks to improve, there needs to be increased capacity and financial incentives for quests to book vacations. For that, they’ll need Cast Members who may or may not be on the “most critical” list. Without Cast Members in food and beverage to support the return of the Disney Dining Plan and extra magic hours, people will hold off booking stays. With large sections of parks under refurbishment, people will hold off booking stays. That’s all revenue lost from their books that is desperately needed to solidify the financial footing of the company.

Iger and team have about 60 days to put together a plan with a timeline for its implementation. It doesn’t have to be perfect BUT it does need to inspire and be credible in the eyes of Cast Members, guests, and shareholders. If not, the next quarterly results meeting will be worse than the last one and that’s not a great place for the company to be in.

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