Disney cuts high-level Fox executives and will shut down Fox 2000 label

Two days after completing its landmark acquisition of the legendary Fox studio, Walt Disney Co. began laying off senior-level executives in an effort to wring savings from the $71.3-billion deal.

The initial cuts Thursday affected about two dozen people, most of whom are high-level executives at the 20th Century Fox lot in Century City, according to people familiar with the matter who were not authorized to comment. Termination notices and severance packages started going out Thursday morning.

Among those who are losing their jobs is Chris Aronson, Fox’s well-liked president of domestic theatrical distribution who joined the studio in 2005. Others who are leaving the film studio include marketing President Pam Levine, international distribution head Andrew Cripps and domestic publicity head Heather Phillips.

Marketing co-president Kevin Campbell, product strategy head Mike Dunn, chief content officer Tony Sella and 20th Television President Greg Meidel are departing as well.

“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.”

Disney’s Fox acquisition: Everything you need to know »

As part of the integration, Disney will close down the Fox 2000 label run by Elizabeth Gabler. The unit is best known for producing book adaptations, including “The Hate U Give,” “Hidden Figures” and “Diary of a Wimpy Kid.”

The move is a surprise because Disney had previously indicated that Gabler would continue to run Fox 2000 under Disney ownership. Although the studio plans to complete the productions that are underway, it will not take on any new projects, people close to the situation said.

More than 3,000 people, mostly at Fox, are expected to lose their jobs as Disney determines how it will integrate the companies, according to people familiar with the situation. Many of those jobs are in Los Angeles.

Some of those cuts were expected to come this week, but the bulk will probably occur over the next weeks and months.

Deep cuts were widely expected at departments including distribution, home video and marketing, areas where Disney and Fox have considerable overlap. Although some Fox executives are joining Disney, several others won’t be, including 20th Century Fox Film Chairman Stacey Snider. She is considered a candidate to replace Kevin Tsujihara, the former Warner Bros. boss who resigned this week.

Disney has not disclosed a target number for job cuts. However, the Burbank company has said that it expects “at least $2 billion in cost synergies by 2021 from operating efficiencies realized through the combination of businesses,” most of which will come through workforce reductions.

Disney finalized its purchase of Fox on Tuesday as it embarks on a plan to use the combined company’s formidable stable of intellectual property to take on Netflix and others in the highly competitive streaming video market.

Under the deal, Disney acquired the Fox film and television studios, cable channels FX and National Geographic, and a portfolio of international television properties, including Star India. Disney also assumed Fox’s 30% ownership interest in Hulu, giving Disney 60% of the streaming service.

Rupert Murdoch and his family held on to Fox News Channel, the Fox broadcast network and Fox Sports, along with the 50-acre studio lot in Century City. The Murdoch family on Tuesday created a slimmed-down company called Fox Corp.

People working at Fox and in Hollywood at large have been expecting major changes. On Thursday, Walt Disney Studios Chairman Alan Horn and President Alan Bergman sent a memo to staff, in which they acknowledged that the integration would be disruptive.

“Although there is much to look forward to, we know this integration will entail quite a bit of change across our organizations,” the studio bosses wrote. “We want to acknowledge that and assure you we are committed to engaging in this process thoughtfully and communicating changes as we are able — most importantly with respect for all involved.”

At the same time, Horn and Bergman projected an upbeat message for the company’s future, heralding the bold strategy led by Disney Chairman and Chief Executive Bob Iger. They also said they planned to make announcements about the studio’s leadership structure soon.

“It will take some time to reach our future fully integrated state,” they said. “Day-to-day, our top priorities remain the same: to support the great content we’re creating and deliver a superb experience to our consumers, and to continue to build an inspiring, inclusive environment where employees can bring their best to work every day.”

Here’s the full memo:

With the announcement that the Disney-Fox deal is officially complete, we begin an exciting new chapter in the history of both our companies and the industry. This is a major piece of the bold strategy Bob Iger has set for the Walt Disney Co. as our business rapidly evolves.

It’s astounding and humbling to consider the rich, dynamic legacies of these storied studios and the endless possibilities ahead as we unite them. It’s not something we take for granted as leaders, and we are looking forward to working together to build a team of unparalleled creativity and innovation.

We’ve learned a lot in meetings held prior to deal close, yet there are many things that could not be discussed for regulatory reasons. We are happy to now have the chance to really understand and share how we operate at the ground level — and we realize we are only at the beginning of the process.

Although there is much to look forward to, we know this integration will entail quite a bit of change across our organizations. We want to acknowledge that and assure you we are committed to engaging in this process thoughtfully and communicating changes as we are able — most importantly with respect for all involved.

We’ll be making announcements very soon about our senior leadership structure. It will take some time to reach our future fully integrated state. Day-to-day, our top priorities remain the same: to support the great content we’re creating and deliver a superb experience to our consumers, and to continue to build an inspiring, inclusive environment where employees can bring their best to work every day.

As we start this journey of bringing together the combined might of Disney and 21st Century Fox to create the best entertainment studio, we’d like to thank you all for everything you’ve done to bring us to this point and for your continued focus, support, and patience as we proceed.

Sincerely,

Alan Horn

Chairman, the Walt Disney Studios

Alan Bergman

President, the Walt Disney Studios

[email protected]

@rfaughnder