The board of directors at the Walt Disney Company voted to replace the company’s chief executive, Robert Chapek, on Sunday.
As part of the transition, the board approved the re-hire of former CEO Robert Iger to that position once again, the company said in a statement on Sunday.
“The board has concluded that as Disney embarks on an increasingly complex period of industry transformation, Bob Iger is uniquely situated to lead the company through this pivotal period,” Susan Arnold, the chairman of the Disney board, said in a statement. “We thank Bob Chapek for his service to Disney over his long career, including navigating the company through the unprecedented challenges of the pandemic.”
The decision to replace Chapek with Iger follows a less-than-steller quarterly earnings report that put the spotlight on Disney’s outsized content spending in order to beef up its flagship Disney Plus streaming service as well as general entertainment streamer Hulu and sports-centric ESPN Plus.
While Disney has seen growth across all three of its streaming services, the company’s executive leadership has been criticized for green-lighting many expensive movies and TV shows that have weiged heavily on its earnings.
Last quarter, Disney said it lost $1.47 billion, mostly due to content and marketing expenses for its streaming services, though other parts of the company’s portfolio weighed heavy on earnings. Its broadcast and cable networks have seen a pullback in ad spending over the last few quarters — a trend that has impacted other media companies.
Disney has responded in two ways: By raising prices across its streaming services (Disney Plus and Hulu are set to increase their subscription price in just a few weeks), and by cutting down on company expenses. Earlier this month, Chapek sent a memo to employees in which he announced an immediate hiring freeze and warned of future layoffs. He also prohibited employees from engaging in non-essential business travel, and said staffers were largely prohibited from attending conferences unless they had approval from an executive.