WSJ Reports First Major Rift Between Bobs Was Chapek Wanting to Initiate Layoffs Before CARES Act Passed

The Wall Street Journal has new reporting on the history of the rift between Bob Chapek and Bob Iger that eventually led to Chapek’s ousting and Iger’s return. According to the report, a major origin in the rift was Bob Iger’s desire to delay layoffs until Congress had passed their economic assistance package back in 2020.

What’s Happening:

  • The Walt Street Journal report written by Erich Schwartzel, Emily Glazer, Robbie Whelan, and Jessica Toonkel goes into new details about how the two Bobs drifted apart.
  • Upon the onset of the pandemic, Mr. Iger revealed he would be taking a more hands-on approach due to his experience despite earlier stating day-to-day decisions would be Bob Chapek’s domain.
  • The first major rift was related to the COVID-19 related layoffs.
  • Iger wanted to delay any layoffs until after the passing of the CARES Act, a massive spending bill being debated in Congress meant to blunt the pandemic’s economic impact, so that Disney employees could make use of its protections. Chapek however wanted to move far quicker with layoffs.
  • Iger overruled Chapek and convinced the board that it was better to wait, to which Chapek was reportedly “infuriated.”
  • Over the past two years, Iger has made it known to friends and colleagues that he disapproved of changes that Chapek was making. Some associates even said that Iger would fixate on the topic so much that it became uncomfortable.
  • It appears that Iger felt Chapek, who set ambitious goals for the growth of Disney’s streaming business, had given priority to that business at the expense of other parts of Disney, like cable television and the theme parks.
  • Another thought was that Chapek was too responsive to changes in Disney’s share price.
  • Iger also became alarmed by large ticket price increases at the Disney Parks that Chapek argued would boost revenue and limit overcrowding.
  • “He’s killing the soul of the company,” Iger told more than one confidant.
  • Iger is planning on being far more involved in the CEO succession process this time around, as his contract comes to a close on December 31st, 2024. Deciding who will follow him ultimately becomes part of his legacy.

Watch below as Benji and Luke discuss the impact of this article: