Disney’s chief legal officer has informed employees that tough decisions lie ahead as the company’s legal and government affairs division prepares for significant downsizing. This comes amid broader discussions about layoffs throughout various sectors of the entertainment giant.
Horacio Gutierrez, who holds the title of chief legal and global affairs officer, mentioned in a memo that the department would essentially begin anew as advancements in technology redefine how legal and professional tasks are approached.
“How should LGA reinvent itself to best serve the Disney of tomorrow?” Gutierrez asked, referencing the acronym for his division.
He noted that this transformation process has been designated as LGA 2.0.
According to reports, he conveyed to employees that the division, which has nearly 1,000 staff globally, would be downsized, impacting some individuals directly.
“LGA will be a much smaller organization than it is today, and some of you will personally be affected by decisions we make in this process,” he stated.
Gutierrez acknowledged the necessity of difficult choices concerning resource allocation, including staffing decisions.
While he did not specify how many positions might be cut or a timeline for these changes, he emphasized that this wasn’t a reflection of the current team’s strength, highlighting their talent and long tenures with Disney.
However, he pointed out that the professions within LGA are evolving due to technological advancements and new operating models.
“The reality is that the professions that comprise LGA — including legal, government relations, operations and others — are going through their own reinvention as technology reshapes how work gets done,” he wrote.
The review will look at the group’s structure, service delivery, knowledge sharing, collaboration, and technology use, as detailed in the memo.
Gutierrez reportedly indicated that the department will explore “automating certain workflows by leveraging the latest technologies,” including self-service models, alternative legal providers, shared services, and outsourcing.
This memo is part of a larger corporate strategy as Disney has indicated to investors that it is considering significant labor reductions as part of a cost-cutting initiative to free up resources for growth.
“We remain highly focused on reducing costs across the enterprise to create incremental capacity to invest for growth and are evaluating a variety of levers, including reductions in labor and selling, general and administrative expenses,” Disney said in a quarterly earnings report.
Chief Financial Officer Hugh Johnston reiterated this intention during an earnings call, highlighting plans for substantial cost reductions, especially regarding labor and related expenses.
The mention of automation aligns with Disney’s increasing emphasis on technology and artificial intelligence in its operations.
In a previous earnings report, Disney noted that it sees emerging technologies as a “significant opportunity,” detailing AI applications in its parks and Imagineering projects.
However, the latest figures reveal that the company incurred $180 million in severance costs during the first nine months of the fiscal year.
Disney has indicated that it is still conducting its cost review and will keep investors informed on any developments as they arise.
Gutierrez joined Disney from Spotify in 2021 and remained in his role when Bob Iger returned as CEO after Bob Chapek’s exit.
Recently, Chapek has spoken out about his dismissal, claiming Iger played a behind-the-scenes role in undermining his leadership, despite admitting he lacks concrete evidence for some of his more controversial claims concerning Iger’s motives.
The Post has reached out to Disney for comment.
