Disney’s Legal and Global Affairs division is preparing for a significant reduction in size as the company rethinks how the department operates, including through automation, self-service systems and possible outsourcing.
Chief Legal and Global Affairs Officer Horacio Gutierrez delivered the warning in a memo sent at noon on Sept. 18 to the department, known as LGA, which has fewer than 1,000 employees worldwide.
“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,” Gutierrez wrote.
The memo does not explicitly say that artificial intelligence will replace employees. However, it makes clear that staffing will be affected as Disney examines new ways to handle the department’s work.
Gutierrez said the company would consider “automating certain workflows by leveraging the latest technologies,” as well as adopting self-service models, using alternative legal providers, expanding shared services and even outsourcing some work.
Disney’s legal operation faces “hard choices”
Gutierrez described the initiative as part of a wider reinvention affecting legal, government relations, operations and other professions as technology changes both day-to-day work and the business structures supporting it.
He said he was taking “a dispassionate look at every aspect of how we do our work” in an effort to make the organization more efficient and cost-effective.
“Obviously, this will require hard choices about where and how we deploy our resources and investments, including our staffing investments,” he wrote, adding that how the team works will look different “in the months and years ahead.”
The message has circulated beyond the LGA department among Disney employees, some of whom fear that its blunt assessment could also apply to other parts of the company. Staff members have been bracing for another round of layoffs that is expected to begin as early as next week, although Disney has not confirmed a timetable or the scope of those cuts.
The unspecified reductions planned within LGA are understood to be separate from that anticipated next round of company cuts.
Gutierrez’s memo has also been shared across the entertainment-law community in Los Angeles, New York City and Washington, D.C.
Technology appointment adds to the timing
The memo arrived on the same day Disney announced Karandeep Anand as its first Chief Technology Officer. Anand, the former CEO of Character.AI, will report directly to Disney boss Josh D’Amaro.
Gutierrez also invoked D’Amaro’s vision in making the case for the transformation. He told employees that smarter working practices could allow Disney to serve more fans at lower costs while freeing capital for content, guest experiences and technology infrastructure.
“Josh’s vision is of a Disney that succeeds in a changing market by breaking internal walls and embracing technology to amplify what makes it great, not by clinging to the way things always have been done,” Gutierrez wrote.
The warning follows Disney job cuts in April and July. Executives also made clear during the company’s Aug. 5 earnings call that more reductions were coming.
At the same time, a deadline was approaching for eligible longtime Disney executives to accept a voluntary early-retirement offer. EVP and Chief People Officer Sonia Coleman introduced that program in August, and the process was expected to be followed by involuntary layoffs.
Gutierrez joined Disney from Spotify in late 2021, during Bob Chapek’s tenure as CEO, replacing Disney veteran Alan Braverman in the company’s top in-house legal position. He was among the small number of key Chapek lieutenants who remained in their roles after Bob Iger returned as CEO in late 2022.
What Happens Next?
The LGA memo confirms that the department will shrink and that some employees will be directly affected, but it does not provide a specific number of positions to be eliminated or a schedule for those decisions.
Disney did not comment Thursday on Gutierrez’s message or on the timing and scale of the upcoming company layoffs.