Disney CEO Bob Iger has implemented a sweeping reorganization of the company’s operations, creating a Disney Entertainment business unit to be led by Dana Walden and Alan Bergman, as well as a separate unit for ESPN’s operations including streamer ESPN+.

Josh D’Amaro will remain in charge of the third division within the company, Disney Parks, Experiences and Products.

Walden, the TV content chief who was promoted last year to chairman of Disney General Entertainment Content, and Bergman, the film veteran who has most recently served as chairman of Disney Studios Content, will be peers at the top of Disney Entertainment, which will include the global film and TV content production operations, Marvel Studios, Pixar, Disney+, Hulu, ABC, Disney Channel and other entertainment-related assets. ESPN becomes its own standalone unit led by chairman Jimmy Pitaro.

The move does away with the Disney Media and Entertainment Distribution structure established in 2020 by Iger’s predecessor, Bob Chapek, who was ousted in November to pave the way for Iger’s return to the role he held for 15 years before handing the CEO reins to Chapek in February 2020.

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Iger announced the reorg news Wednesday on Disney’s earnings call, during which company execs discussed their promising quarterly results, as well as Disney+’s first-ever subscriber loss. While revealing the new plan, Iger stated that the focus was to “return creativity to the center of the company.”

Additionally, the new-old Disney chief said the company will be laying off 7,000 employees (3% of the workforce) and eyeing $5.5 billion in total cost reductions.

The Disney Entertainment realignment is designed to streamline the content production and distribution decision-making process under unified leadership. It’s also aimed at making the production side accountable for spending and the success of content. the Disney Media and Entertainment Distribution structure was a radical break with tradition that separated content creation from distribution in a way that was designed to help Disney grow quickly to feed new streaming platforms but in practice proved difficult to navigate for executives and creatives alike.

Disney’s theme parks and cruise lines and consumer products units will continue to be housed within the Disney Parks, Experiences and Products unit, which is unchanged in the reorganization. The decision to separate out ESPN and its ESPN+ streaming arm will likely spur speculation about Disney seeking a sale or spinoff of the sports giant.

Iger announced his intention to restructure the company soon after his unexpected return as CEO in November, following then-CEO Bob Chapek resigning effective immediately at the behest of the Disney board after a tumultuous tenure of nearly three years.

In a Nov. 21 memo to Disney staffers, Iger said restructuring at the media giant will begin “in the coming weeks.” The first move made part of that restructuring was the departure of Kareem Daniel, chairman of Disney Media and Entertainment Distribution and previously president of consumer products, games and publishing, whom Iger thanked for “his many years of service to Disney” in the internal letter.

“Without question, elements of DMED will remain, but I fundamentally believe that storytelling is what fuels this company, and it belongs at the center of how we organize our businesses,” Iger wrote.

Disney last reorganized its media and entertainment business in October 2020, with a significant overhaul to operations made by Chapek that included the creation of the Media and Entertainment Distribution group. The division was made responsible for all monetization of content — both distribution and ad sales — and given oversight over all of Disney’s streaming services, including Disney+, Hulu and ESPN+, and given sole P&L accountability for the media and entertainment businesses.

The responsibility of content creation was split into three teams, Studios, General Entertainment, and Sports. Those were led at the time by Bergman and Alan Horn, Peter Rice and ESPN’s Pitaro. Horn has since retired and Rice was ousted from the top TV management job by Chapek in June 2022. Walden was elevated to top slot after Rice’s departure. Rice and Walden were both 21st Century Fox veterans who came to Disney along with its 2019 acquisition of Fox.

Chapek did not change the roles of D’Amaro, head of Disney Parks, Experiences and Products, or Rebecca Campbell, chairman of International Content and Operations, during that reorg.