Layoffs Begin at 20th Century Fox After Disney Deal Closes
Senior leadership in marketing and distribution is being hit hard.
Layoffs brought about by Disney's $71.3 billion acquisition of most of the assets of the former 21st Century Fox commenced on Thursday.
Longtime 20th Century Fox film president of domestic distribution Chris Aronson was informed in the morning that he won’t be joining Disney. He has been given 60 days' notice, sources tell The Hollywood Reporter.
By early afternoon, others in top leadership roles at the film studio were handed pink slips. President of worldwide marketing Pamela Levine, co-president of marketing Kevin Campbell and chief content officer Tony Sella were informed they are likewise out.
Ditto for international distribution president Andrew Cripps, along with exec vp of corporate communications Dan Berger, exec vp of legal affairs and exec vp of Fox Stage productions Bob Cohen and exec vp publicity Heather Phillips, among others. (It was previously known that outgoing 20th Century Fox film chairman/CEO Stacey Snider wouldn't be part of the combined venture.)
Some employees are being told they will be kept on for a transition period, anywhere from three to six months, a source says. It's not clear how many will stay on with Disney permanently, although the marketing and distribution departments were always expected to be hit hard.
"It has been an honor and a privilege to lead the domestic distribution team, which I consider to be the gold standard in the business," Aronson said in a statement. "While I am disappointed not to continue, I look forward to starting a new chapter in this business during this exciting time of change."
On the TV side, Twentieth Television president Greg Meidel is out. Fox Consumer Products boss Jim Fielding has also been laid off as his division is being absorbed by Disney. Sources say of the 50 or so U.S.-based staffers in the division, five people have been laid off. The remainder are all expected to keep their jobs as the unit becomes part of Disney.
Disney closed its historic takeover of the Fox film and TV studio, FX and National Geographic cable channels, Star India, 30 percent of Hulu and more just after midnight ET on Wednesday, and layoffs have been expected ever since. Disney chairman and CEO Bob Iger at the time of closing said the deal would "create significant long-term value for our company and our shareholders."
Disney said prior to the close that it was eyeing $2 billion in annual cost savings by 2021, and observers presumed much of that would come by way of layoffs.
While Disney never clarified how many people would lose their jobs, analysts say that by the time the dust settles, 4,000 of the jobs the conglomerate provides could be lost. Disney-skeptic analyst Rich Greenfield of BTIG even put the number at 5,000 to 10,000 over a longer time frame.
Acquisitions are usually accompanied by layoffs, though the Disney-Fox merger was always expected to be a bit more brutal than others given the amount of overlap in various job functions, especially at the film studio's marketing, distribution and home entertainment units.
Management didn't provide any insight into possible layoffs before the deal closed. "We have spoken about $2 billion in cost synergies, and we're confident that we're going to be able to deliver those," Iger said on an earnings call in August. "There will be revenue synergies as well, but we have not been specific about what they are and we don't intend to get specific about that, at least for the foreseeable future."
When the deal closed, the exec said in a memo: "We’ve spent the last year exploring the new opportunities and synergies generated by bringing our two legendary companies together. Leaders across both organizations have worked closely together to understand how to best unlock this potential and unleash innovation and creativity to generate long-term growth. We’re confident in our integration strategy and in our ability to execute it effectively; and we’re inspired and energized by the new possibilities."
Added Iger: "Our integration process will be an evolution, with some businesses impacted more than others. We’ve made many critical decisions already, but some areas still require further evaluation."
Wall Street has expected early job cuts in the U.S., followed by layoffs in international markets. "You can anticipate more domestic at the front end, just because of regulatory issues outside of the U.S.," Disney CFO Christine McCarthy told analysts in August after mentioning that roughly 50 percent of the cost-savings target would be achieved in the first year following the deal's close.
The layoffs come as Disney gets ready to later this year launch its Disney+ streaming competitor to Netflix, an initiative that should provide more jobs as it ramps up.
March 21, 1:55 p.m. Updated with additional layoffs.