After a primary month at the process that would slightly be described as “Chapekian,” it sort of feels that the honeymoon is over for brand new Disney CEO Josh D’Amaro. Right here’s a rundown of the demanding situations, plus the most recent document of rumored layoffs at the horizon.
If you happen to neglected it, Mr. D’Amaro’s Wild Journey as CEO of the Walt Disney Corporate formally began as of March 18, 2026. D’Amaro changed into CEO as of the 2026 Annual Assembly of Shareholders, at which level, Bob Iger transitioned to a brand new advisory position till his retirement from the corporate on December 31, 2026. That was once best 3 weeks in the past, but it surely most definitely appears like an eternity for D’Amaro.
His first day was once slightly uneventful and went strangely easily. He treated the Q&A throughout the assembly comfortably, even the extra contentious topics (see CEO Josh D’Amaro on Disney Parks Top Costs vs. Visitor Pride, DAS Adjustments, Lightning Lane Laws). A few days later, there was once some controversy/cancellation with the Bachelorette that I don’t totally perceive. Seven days later, issues began to get in reality tough.
First got here hassle in paradise with the Epic Video games partnership. That studio introduced the layoffs of over 1,000 workers, aimed toward placing Epic Video games in a “extra solid position,” in keeping with a memo despatched to workers through CEO Tim Sweeney.
The downturn in Fortnite engagement that began in 2025 approach the corporate is spending considerably greater than it’s making, and has to make primary cuts to stay the corporate funded. This layoff, at the side of over $500 million of recognized charge financial savings in contracting, advertising, and shutting open roles is the approach to that purpose.
The Epic Video games layoffs comes amidst industry-wide demanding situations that come with slower enlargement, weaker spending, and more difficult charge economics; present consoles are promoting lower than final era’s, construction prices and timelines have exploded, there’s been a slowdown popping out of COVID, and video games are competing for time towards different increasingly-engaging varieties of leisure.
The Epic Video games partnership was once one among D’Amaro’s marquee projects whilst head of Disney Studies. The drop in Fortnite engagement moves me as a possible crimson flag, and I’m involved that the Fortnite fad is coming to an finish, or a minimum of post-peak. Reside provider video games strike me as one thing that can not be sustained indefinitely as its core target market ages out of the product or the following scorching new factor comes alongside.
On the identical time, Disney wishes luck within the gaming realm to seize the time and mindshare of more youthful generations. That is reputedly why Disney made the deal within the first position, and why it’s been any such large initiative for D’Amaro. I’m no longer positive what the answer is, yet concern it may well be seeking to achieve Epic Video games.
Both manner, this one struck me as a large blow for Disney and D’Amaro. (It’s additionally person who’s outdoor the pastime of our target market, as evidenced through the meager 4 feedback on our authentic publish concerning the Epic Video games layoffs and cost-cutting.)
Later that very same day got here the announcement that OpenAI was once “pronouncing good-bye” to Sora.
The announcement got here simply 3 months after Disney made a supposedly groundbreaking maintain OpenAI. Underneath the three-year licensing settlement, Sora would had been ready to generate user-prompted movies from a collection of greater than 200 masked, animated or creature characters from Disney, Surprise, Pixar and Megastar Wars.
Sora and ChatGPT Pictures had been to generate “fan-inspired” movies with Disney’s approved characters in early 2026, with Disney+ so as to add a curated choices of Sora-generated movies later in 2026. Consistent with the corporations, the settlement introduced those “leaders in creativity and innovation in combination to free up new chances in imaginative storytelling.”
Disney has now ended its partnership with OpenAI, which integrated plans for the media conglomerate to take a $1 billion stake within the AI corporate led through CEO Sam Altman. That deal by no means closed and Disney by no means paid the $1 billion. Which means that the billion bucks is now unaccounted for, and may well be spent on one thing of worth as an alternative of metaphorically lit on hearth.
Simply someday ahead of that announcement, Disney and OpenAI groups had been operating in combination on a challenge connected to Sora, OpenAI’s AI video device, in keeping with reporting through Reuters. Disney was once blindsided with phrase that OpenAI was once losing the device altogether, and “it was once a large rug-pull,” in keeping with the Reuters supply.
Not like the Epic Video games deal, this one if truth be told struck me as a stealth win for Josh D’Amaro. It wasn’t a perfect information day for Burbank, but it surely was once most definitely a internet sure in the longer term. The unique OpenAI announcement felt very Iger-esque, and looked like an impulsive settlement made to take a look at to have some say within the wild west of the AI panorama. (And likewise for a inventory spice up that didn’t occur.)
I don’t doubt that Disney will contain itself in AI by hook or by crook, and it wouldn’t marvel me if no matter they land on finally ends up being some other erroneous thought. However the Sora association appeared haphazard and weighted down with landmines; Disney can do higher, even at making lemonade out of lemons. The optics of 2 offers souring at the identical day weren’t nice for D’Amaro, yet this was once nonetheless a blessing in conceal.
All of this has been happening towards the backdrop of the Iran conflict, which clearly was once no longer a D’Amaro determination yet may just nonetheless have large detrimental ramifications for Disney’s core trade. Possibly extra so than the rest mentioned right here relying upon how lengthy it drags on.
The primary is the extra direct and quick affect, which is a possible slowdown in summer time shuttle led to through $4 in step with gallon gasoline. We’ve coated this on a number of events, albeit no longer throughout the lens of D’Amaro’s get started as CEO, so I’m no longer going to fixate on it. (See Why the Iran Battle May just Reduce Crowds at Disney Global & Negatively Have an effect on Your 2026 Trip Plans.)
Parks & Inns has been the largest vibrant spot for Disney within the final a number of years, and what landed D’Amaro within the CEO seat. The war and gasoline costs are patently outdoor of his regulate, yet shareholders will take little solace in that if/when there’s an affect on bookings and in step with visitor spending at Walt Disney Global and Disneyland.
There’s additionally the wildcard of Disneyland Abu Dhabi, which was once a large speaking level when D’Amaro was once first introduced as CEO. It’s in all probability noteworthy that the challenge was once no longer discussed through call throughout the shareholding assembly, yet as an alternative referenced not directly as a park in a “new nook of the sector.”
At this level, there were indicators that it’s complete steam forward of Disneyland Abu Dhabi, yet I’d strongly emphasize the “at this level” portion of that sentence. The Center East has extra announced-but-unbuilt theme parks than it does operational ones.
Disneyland Abu Dhabi is a licensing maintain no monetary publicity for Disney and its regional spouse, Miral, obviously needs to continue with the challenge (at this level), which might be each positives. Alternatively, this park isn’t with out possibility for the Walt Disney Corporate. If regional instability persists (or resumes at a later date), there is not any extra distinctly “American” goal than a Disney theme park, and Iran has demonstrated no reluctance to strike allies within the area.
I’m satisfied I’m no longer the person who has to make a decision whether or not the monetary praise and logo enlargement are value that possibility. It’ll be a difficult determination for D’Amaro to make, and one this is a ways from a “executed deal” it doesn’t matter what media reviews these days recommend. Nobody is aware of what the geopolitical panorama will appear to be on this nook of the sector in 2035 or so when Disneyland Abu Dhabi would most probably debut.
The most recent construction that’s sparking backlash on social media is a document through the Wall Side road Magazine that Disney will shedding as much as 1,000 folks within the coming weeks. The document signifies that the layoffs will likely be within the consolidated advertising division, and in large part (if no longer solely) affect the streaming and studio facet.
As WSJ issues out, layoffs have change into a brutal truth around the leisure {industry}. Sony Footage, Paramount and Warner Bros. Discovery have already minimize team of workers. Extra layoffs are anticipated if and when Paramount acquires Warners.
Disney and those different studios had been adjusting to the ‘new commonplace’ of smaller earnings from streaming as contrasted with linear tv, in addition to lowered field workplace, and intense pageant from tech firms. Disney could also be combining the team of workers of its Disney+ and Hulu because it merges the streaming services and products into one app, and redundancies will outcome from that.
On most sensible of that, Disney needs to disencumber cash to spend money on companies the place it sees enlargement possible. The corporate has laid off greater than 8,000 folks since Bob Iger returned as CEO in 2022 and started a big restructuring. Plans for the approaching layoffs started ahead of D’Amaro took the helm as CEO, in keeping with WSJ assets.
Disney hired 231,000 folks on the finish of its 2025 fiscal yr, some 80% operating within the Studies department, which contains the labor-heavy theme parks and cruise line (plus shopper merchandise). Maximum layoffs since 2022 have passed off in Disney’s leisure, ESPN and company facet.
On the identical time, Walt Disney Global, Disneyland, and Disney Cruise Line have all noticed their headcounts building up since 2022. In line with digging again into the DTB Archives, we discover no proof of any frontline Forged Member layoffs since 2022–best enlargement. The large spherical of seven,000 layoffs below Iger involved most commonly the metaverse, streaming and studios. Disney in particular mentioned on the time that it could no longer affect frontline Forged Individuals on the parks.
Disney has been consolidating operations to chop prices and coordinate its efforts throughout divisions. Previous this yr, the corporate mixed advertising departments for leisure, studies and sports activities below new Leader Advertising and marketing Officer, Asad Ayaz.
Ayaz’s plan to unite the promoting crew and cut back bills is code-named Venture Consider, in keeping with WSJ. Disney has been operating with experts from Bain & Co. to strategize its cost-cutting.
Past his plan for united the corporate as “One Disney,” D’Amaro hasn’t laid out specifics for reshaping the corporate since taking on final month. The ones just about the corporate stated one among his priorities is having other divisions collaborate extra briefly and successfully, in keeping with WSJ. Unsurprisingly, workers have feared layoffs can be a part of that equation.
With regards to observation, it’s value underscoring which divisions those layoffs are impacting and the monetary realities of stated companies. Extra so, it’s essential to notice that, to the level that is related to Parks & Inns, it’s no longer a tale about layoffs, yet reasonably, liberating up sources from suffering segments to extend spending in a hit ones.
I’d additionally upload that we automatically confer with Disney as a ‘bloated forms’ incapable of doing anything else briefly. I’d forestall wanting expressing a favorable opinion of “One Disney” since we all know nearly not anything about it at this level, and a number of other previous strategic projects had been half-baked or unhealthy. I love the speculation of the corporate being extra nimble, interconnected, and running with much less inner friction. The satan is in the main points, even though, so it’ll come right down to execution.
The worst a part of that is the unforced error of giving a code-name to a challenge that’ll contain layoffs. I take into account that the code-name refers back to the unification initiative, yet c’mon, it additionally involves layoffs. It doesn’t take a genius to foresee that media reviews are going to attract a connection between the code-name and the layoffs. By no means give a code-name, particularly a favorable and cutesy one, to anything else involving layoffs. It simply turns out callous and vicious.
None of this can be a nice search for D’Amaro so early on in his tenure. It doesn’t matter what the nuanced truth or the truth that layoffs are a part of trade, particularly a contracting one, that is the most recent in a continuation of what’s already been a coarse first month for D’Amaro.
As any individual who watched the sluggish movement Chapek crash from the entrance row, D’Amaro will have to be cognizant of simply how a lot optics topic. If those layoffs had been deliberate below Iger, I’m in truth stunned they weren’t additionally introduced below him to spare the brand new CEO from the fallout.
Failing that, I’m stunned D’Amaro didn’t wait somewhat longer to make those cuts, particularly since I’d suppose extra are most definitely at the manner as soon as the entire “One Disney” initiative launches in earnest.
Whilst I don’t consider each and every problem above has been a real detrimental (at minimal, the Sora deal falling thru is a blessing in conceal), perceptions are paramount–and it’s been a coarse first (lower than) month for Josh D’Amaro. No longer reasonably Chapekian, yet that was once additionally throughout COVID, so the trade surroundings was once other.
After he was once named CEO, we revealed 11 Nice Adjustments Josh D’Amaro May just Make at Walt Disney Global for Giant Wins. It’s no longer too overdue to put in force a few the ones ideas, and rating wins with theme park fanatics. It received’t undo the detrimental PR from the entire above, yet it could nonetheless be welcome information.
As any individual who just about best cares concerning the theme parks, I’m a staunch recommend of the corporate making an investment more cash in Walt Disney Global and Disneyland, and not more in nearly the whole lot else. This has been one among our large court cases through the years–that Walt Disney Global is handled as the money cow that price range the corporate’s forays and follies into different endeavors, and is milked when stated tasks perform at a loss.
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YOUR THOUGHTS
What do you call to mind Josh D’Amaro’s first 3 weeks as Disney CEO? Is the honeymoon over, or is a minimum of a few of this detrimental information if truth be told positives in conceal? Do you settle or disagree with our tests? Any questions we will be able to mean you can resolution? Listening to your comments–even whilst you disagree with us–is each fascinating to us and useful to different readers, so please percentage your ideas under within the feedback!
