Tag Archives: reorganization

Bob Iger moves fast to dismantle Chapek’s reorganization of Disney


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One day after the shock announcement of Bob Iger’s return to Disney, and the resulting ouster of his successor-turned-predecessor Bob Chapek, an astonished Hollywood is grappling with what exactly the move will mean for the entertainment behemoth’s short-term and long-term future.

But while there is no shortage of questions that are being asked, two things are certain. First, investors are thrilled to have him once again reigning over the Magic Kingdom. Disney’s shares ended Monday up more than 6% on a day that the Dow Jones was slightly down. Second, Iger is moving fast — not even waiting a full 24 hours to announce sweeping changes — to dismantle Chapek’s reorganization of the company.

The speed at which Iger is hurtling is especially remarkable given that Disney’s board only made its overture for Iger to return to the embattled company on Friday. “It literally started Friday and ended Sunday,” a person with knowledge of the matter told CNN, adding that Iger “felt a sense of obligation to go back because he really does care about the company.”

Now he’s already calling big plays.

A version of this article first appeared in the “Reliable Sources” newsletter. Sign up for the daily digest chronicling the evolving media landscape here.

In a Monday evening memo sent to employees of Disney Media and Entertainment Distribution, a key organ of the company created by Chapek that frustrated some creatives, Iger announced that Kareem Daniel, the division’s chief and a Chapek ally, would “be leaving the company.”

Iger also announced the entertainment giant will be undergoing a broader transformation with him back at the helm. “Over the coming weeks, we will begin implementing organizational and operating changes within the company,” Iger wrote to employees. “It is my intention to restructure things in a way that honors and respects creativity as the heart and soul of who we are.”

Iger added that he had asked Dana Walden, Alan Bergman, Jimmy Pitaro, and Christine McCarthy to “work together on the design of a new structure that puts more decision-making back in the hands of our creative teams and rationalizes costs.” Iger said the goal “is to have the new structure in place in the coming months.”

Outside Iger’s reorg of Chapek’s reorg, the Disney chief could also unwind another key decision made by Chapek that is just weeks from taking effect: Disney+’s price hike. Iger launched Disney+ at a mere $6.99 a month and, as CNBC’s Alex Sherman reported, his strategy was to “slowly raise prices over time.” Chapek, however, ditched that modus operandi earlier this year when he spiked the price to a whopping $10.99 a month.

Looking further into the future, bigger questions abound: What will Disney look like when Iger’s two-year deal is up? How will Iger position and reshape the company for the digital age? Could he make a move to shed ABC and the broadcast division? Or perhaps execute a mega-deal to eat a company like Netflix? Or will Disney itself be eaten by a Big Tech giant such as Apple?

One source at a top talent agency pointed out that the biggest question Iger will have to answer is how he “tops his last run as CEO.”

“The world is a much more complicated place than it was a few years ago and it is going to be hard to live up to the reputation he built as the most formidable media CEO ever,” the source said. “And he’s going to have a short runway to pleasing Wall Street, his staff, creative partners, and the audience.”

“So much for going out on top.”

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Goldman plans major reorganization to combine key units -source

LONDON/NEW YORK, Oct 16 (Reuters) – Goldman Sachs (GS.N) is planning a major reorganization to combine its biggest businesses into three divisions with its investment banking and trading businesses being merged into a single unit, a source familiar with the matter told Reuters.

The plans are expected to be announced on Oct. 18 alongside Goldman’s third quarter earnings. Marcus, Goldman’s consumer banking business, will be absorbed into the wealth unit, the source said, confirming an earlier Wall Street Journal report.

A spokesperson for Goldman Sachs declined to comment.

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This is the biggest shakeup since the company’s investor day in early 2020 when it outlined plans for four core units: investment banking, global markets, consumer and wealth management and asset management.

“It’s a head scratcher,” said Mike Mayo, a banking analyst at Wells Fargo. “Right now, there are more questions than answers for Goldman Sachs as it relates to this potential restructuring.”

The move comes as the Wall Street titan seeks to boost its income from fee-based businesses and cut its reliance on volatile trading and investment banking revenues. The changes also signal Marcus, the consumer unit, is being relegated after Chief Executive Officer David Solomon expressed big ambitions to build a mainstream digital bank.

“This may be a way to put Marcus to the back burner as a way to de-emphasize its importance as an investment opportunity,” Mayo said.

Solomon, who became CEO in 2018, has sought to expand Goldman’s footprint in retail banking since his early days at the helm.

But the consumer banking unit that launched in 2016 has struggled to gain traction and suffered from delays. Marcus has yet to launch a checking account that was scheduled for this year. At mid-year, the bank internally forecast that Marcus’ losses would accelerate to more than $1.2 billion in 2022, for cumulative losses of more than $4 billion, Bloomberg reported. Goldman declined to comment on the loss.

Solomon has said the business could generate revenue of over $4 billion by end of 2024.

Net revenue in the consumer-banking unit grew by 23% to $1.49 billion in 2021, reflecting higher credit card and deposit balances, the bank said in its annual report.

Marcus offers digital banking products such as loans, savings and certificate of deposits. It also provides credit cards via a partnership with Apple Inc (AAPL.O).

The consumer business serves more than 14 million customers and had more than $100 billion in deposits with over $16 billion in cards and loans balances, the bank has said.

GOLDMAN SACHS’ OVERHAUL KEEPS MANAGEMENT “ON ITS TOES”

The combined investment banking and trading group will be overseen by Dan Dees and Jim Esposito, who are currently global co-heads of Goldman’s investment banking, and Ashok Varadhan, now co-head of its global markets division, according to Bloomberg.

Marc Nachmann, the bank’s global co-head of the global markets division, will move to help run the combined asset- and wealth-management arm, the report said.

Marcus will become a part of the asset and wealth management unit, the report added.

“This is a way for Goldman Sachs to keep its management team on its toes and to reinforce the intensity that defines Goldman,” Mayo said.

Such an organizational overhaul of the bank comes shortly after its global job cuts in September that could have impacted hundreds of bankers.

In the second quarter, Goldman reported a 48% slump in profit that beat forecasts as fixed-income and commodities trading surged.

Like its Wall Street rivals, the bank is expected to report a sharp drop in third-quarter net profit as investment banking revenue was badly hurt by a slump in dealmaking.

Goldman is expected to deliver a net profit of $2.77 billion in the third quarter, according to analysts’ forecasts compiled by Refinitiv, down from $5.38 billion a year earlier.

Given the tough operating environment, Goldman is closely re-examining all of its forward spending and investment plans to ensure the best use of its resources, Barclays said in a recent report.

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Reporting by Pamela Barbaglia in London, Lavanya Ahire and Akriti Sharma in Bengaluru, Selena Li in Hong Kong, Saeed Azhar in New York; Editing by Sherry Jacob-Phillips and Muralikumar Anantharaman

Our Standards: The Thomson Reuters Trust Principles.

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Goldman Plans Sweeping Reorganization, Combining Investment Banking and Trading

Goldman Sachs Group Inc.

GS -2.31%

plans to fold its biggest businesses into three divisions, undertaking one of the biggest reshuffles in the Wall Street firm’s history.

Goldman will combine its flagship investment-banking and trading businesses into one unit, while merging asset and wealth management into another, people familiar with the matter said. Marcus, Goldman’s consumer-banking arm, will be part of the asset- and wealth-management unit, the people said.

A third division will house transaction banking, the bank’s portfolio of financial-technology platforms, specialty lender GreenSky, and its ventures with

Apple Inc.

and

General Motors Co.

, the people said.

The reorganization could be announced within days, the people said. Goldman is scheduled to report third-quarter earnings Tuesday.

It is unclear how the makeover will shake up Goldman’s senior leadership team, though at least a few executives will have new roles, the people said.

Marc Nachmann,

the firm’s co-head of trading, will slide over to help run the combined asset- and wealth-management arm, they said.

The reorganization is the latest step in Chief Executive

David Solomon’s

push to shift Goldman’s center of gravity toward businesses that generate steady fees in any environment. It also reflects the firm’s struggle to overcome skepticism, from investors and even among some of its own executives, over its ambitions for consumer banking.

The firm’s trading and investment-banking acumen has been Goldman’s calling card for decades, churning out massive profits when the markets favored risk-takers and bold deals. But investors often discounted those successes, reasoning that they are harder to sustain when market conditions turn. And in recent years, Goldman has sought to sharpen its trading arm’s focus on client service.

Following the changes, Goldman’s organizational chart will look more like its peers.

A slide presentation from Goldman’s 2020 investor day offered a glimpse of what a combined banking-and-trading business would look relative to peers. At Goldman, the merged group would have delivered a return on equity of 9.2% in 2019, besting

Morgan Stanley

and

Bank of America Corp.

but below what

JPMorgan Chase

& Co. and

Citigroup Inc.

earned that year.

Bloomberg News earlier reported that Goldman had planned to restructure its consumer-banking arm and was considering combining its asset- and wealth-management businesses.

Goldman’s shares have struggled to keep pace with its rivals, at least by one measure. The firm traded at 0.9 times book value as of June, according to FactSet. That compared with 1.4 times at Morgan Stanley and 1.3 times at JPMorgan.

Goldman has sought to narrow the gap by beefing up the businesses that command higher valuations on Wall Street. Managing wealthy people’s money and overseeing funds for pensions and other deep-pocketed institutions is more profitable than other financial services, and it usually doesn’t put the firm’s balance sheet at risk. And many investors view traditional consumer banking—taking deposits and making loans—as more predictable.

Goldman has invested heavily in building its own consumer bank, and folding the unit into its asset- and wealth-management arm should create more opportunities to offer banking services to wealthy individuals.

Earlier this year, the bank said it aimed to bring in $10 billion in asset and wealth-management fees by 2024.

Write to Justin Baer at justin.baer@wsj.com

Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

Appeared in the October 17, 2022, print edition as ‘Goldman To Fold Businesses Into Three Divisions.’

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New Twitter CEO has already begun a ‘major reorganization’

Following founder Jack Dorsey’s recent departure on Monday, Twitter’s new CEO Parag Agrawal is wasting no time shaking up the company. A report from The Washington Post states that Agrawal announced a “major reorganization of the company” today, including exits by Michael Montano and Dantley Davis, who led engineering and design, respectively.

Twitter confirmed the reorganization to Engadget. A spokesperson said “Parag is focused on operational excellence and setting Twitter up to hit its goals; these changes were made with that in mind.” The changes include moving to a “General Manager model” for teams in the product and technology organizations, which will mean having one person lead the work in those divisions. “This will allow us to operate more cross-functionally and enable faster, more informed decision-making,” the spokesperson added.

Davis earlier today tweeted a picture from a team offsite, saying: “It was the highlight of the past two years at Twitter for me. Thank you to everyone who made this special. It has meant more than words can describe.” Sara Beykpouf, who worked on the company’s product team, also posted that today would be their last day at Twitter, although it’s not clear if this is related to the reorganization.

The Post reported that according to a companywide email it obtained, Montano and Davis will be leaving by the end of the year (i..e, this month). It also indicated that the “reshuffling appears to primarily affect the company’s consumer, revenue, and core tech divisions, which will be helmed by Kayvon Beykpour, Bruce Falck, and Nick Caldwell, respectively.”

In retrospect, there were hints that big changes at the company were underway. In a series of tweets sent by Twitter’s Investor Relations account during the Bank of America Securities 2021 Leveraged Finance Conference yesterday. Specifically, the team said: “We can move faster and execute better. We’ll focus on the same goals, same metrics, and same work. But we believe Parag can help us make decisions faster, and be more clear about where decision-making sits.”

Update (12/3/21, 3:24pm ET): This post was edited to include a statement and details from Twitter that arrived after the story was published.

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C.I.A. Reorganization to Place New Focus on China

A decade ago, the Chinese government systematically dismantled the C.I.A.’s spying operation in the country, with informants captured or killed. Some former officials have blamed a breach of the agency’s classified communications system, while others have blamed a former C.I.A. officer later convicted of giving secrets to China. Since then, the agency has tried to rebuild its networks, but the Chinese government’s power to track the movements and communications of people have slowed the effort.

A senior C.I.A. official said the new technology center would help the agency stay ahead of new technologies that can identify spies. During the last several years, the official said, the agency has been working to address new technological developments and pushing officers not to underestimate adversarial intelligence services.

In the jargon of the C.I.A., tradecraft is the skills spies use to evade adversarial operatives, find new sources and communicate with them securely. Technological advances by countries like China have forced the agency to update and improve their tradecraft. And the senior official said the new focus on technology and China would help in those efforts to continue to transform their tradecraft.

The changes are also an attempt to refine the broad reorganization of the C.I.A. undertaken in 2015 by John O. Brennan, when he became director in the final years of the Obama administration. Before the announcement, Mr. Burns reached out to former agency directors to brief them on the reorganization and his thinking, several of whom said the changes made sense to them.

“The C.I.A. must adapt to the policy priorities of each new administration as well as to the evolving global landscape of national security challenges and opportunities,” Mr. Brennan said. “If there is any country that deserves its own mission center, it is China, which has global ambitions and presents the greatest challenge to U.S. interests and to international order.”

The new reorganization is not nearly so broad as Mr. Brennan’s. But Mr. Burns is undoing two changes put in place by Mr. Brennan’s successor, Mike Pompeo, who was President Donald J. Trump’s first C.I.A. director. Mr. Pompeo created mission centers focused on North Korea and Iran. Those groups will now be folded back into regional centers focused on the Middle East and East Asia.

With the ending of the Iran mission center, its current chief, Michael D’Andrea, is retiring from the agency. The appointment in 2017 of Mr. D’Andrea, who had a long career leading operations against Al Qaeda and other terrorist targets, was a sign of the Trump administration’s hard line on Iran. And inside the C.I.A., Mr. D’Andrea helped craft a more muscular approach against Tehran.

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At pivotal points in human spaceflight, NASA undergoes major reorganization

The body of NASA tasked with managing human spaceflight is being split into two distinct directorates, the agency’s chief announced on Tuesday, embarking on a major reorganization that past officials have tried and failed to execute for years. The move comes as private companies like SpaceX demonstrate leaner methods of putting people in space and as NASA pushes ahead with ambitious plans to build settlements on the surface of the Moon in the next decade.

The breakup of NASA’s human exploration wing, called Human Exploration and Operations Mission Directorate, will spawn two new bodies: first, the Exploration Systems Development Mission Directorate, which will manage NASA’s most ambitious development programs like the Artemis program that are still in formative and testing phases. The second will be the Space Operations Mission Directorate, which will handle more routine, operational programs like the International Space Station and the Commercial Crew Program. Agency officials say categorizing programs based on levels of development rather than areas of expertise will help refine NASA’s focus.

The organizational shakeup was a “strong” recommendation from President Biden’s transition team, Nelson told reporters during a press conference on the changes. One major advantage of the change involves NASA’s budgeting process, which is often fraught with complexity and frequently faces pushback from members of Congress who complain NASA doesn’t provide enough clarity on its exploration plans. With the broad human exploration program now split in two, complex and sometimes ambiguous programs won’t be as intermixed with NASA’s more routine programs. And the two bodies will have separate leaders rather than a single official whose workload has seen steep growth in recent years.

NASA’s human exploration chief, Kathy Lueders, will now lead a new directorate focused on space operations.
(NASA/Bill Ingalls)

“Two heads are better than one,” Kathy Lueders, the current head of NASA’s Human Exploration and Operations Mission Directorate, said during a town hall in Washington, DC, with the agency’s workforce on Tuesday. Lueders, who previously led NASA’s Commercial Crew Program, will move from her post as human spaceflight chief to helm the Space Operations Mission Directorate. Jim Free, a former deputy associate administrator who held senior roles in NASA’s Orion capsule program, will lead the Exploration Systems Development Mission Directorate.

But not everyone in the space industry will be happy with the change. Lueders, seen by many as a champion for commercial space because of her experience leading the Commercial Crew Program during its formative years, won’t be as involved in the agency’s biggest development programs like Artemis anymore. Critics of the reorganization are also likely to see it as more red tape and a new burden of coordination between the two offices that will have to stay in touch on related space programs.

“We’re actually not adding a whole new layer of people,” NASA deputy administrator Pam Melroy told reporters after the town hall, addressing critiques of the move. “There are very few additional positions that will be required… the challenges that we have in coordinating across organizations is exactly the same as it is today.”

“Both of these people are extremely qualified,” Nelson told reporters. “It was obvious, it was common sense, that Kathy’s success should continue in the space operations mission directorate.” Employing a southern colloquialism, he added his decision to pick Lueders and Free for the roles “was as easy of a decision as falling off a log.”

Studies conducted by NASA’s senior leadership under the Trump administration, when Nelson’s predecessor Jim Bridenstine was leading NASA, recommended a similar idea: NASA should spin-off elements related to its ambitious Artemis program into a separate directorate with its own leadership, giving it the focus and resources it’d need to execute an ambitious timeline of putting astronauts on the Moon by 2024. That advice was shelved at the time, current and former officials say, partially because it subtracted resources from other directorates, which frustrated members of Congress.

But now, growing activity in the commercial space arena and the increasing cadence of human space travel, as SpaceX’s recent all-civilian mission to orbit last week showed, warrant changes to how NASA has managed its biggest human spaceflight programs for nearly a decade, NASA’s senior leadership say.

“The last decade has seen extraordinary change and growth,” Melroy said at the town hall. “The impact that NASA has had on commercial space has created new capabilities that we didn’t even know we could rely on.” Citing future development plans with NASA’s long-delayed and over-budget Space Launch System, which is poised to launch for the first time later this year or early next year, Melroy added: “This is exactly the time for us to take a deep breath and say, ‘Wow, we have a chain of development programs, no longer just one monolithic program. How are we going to manage this huge change in scope?’”

NASA’s Artemis program includes a wide range of technologies that fall under the now-decentralized human exploration directorate. SpaceX is developing its Starship system to send NASA’s first astronauts to the surface of the Moon by 2024 (that will probably get delayed). A new space station called Gateway that will orbit the Moon is in the works by a team of international partners. Lockheed Martin is building NASA’s Orion crew capsule to help astronauts get to the Moon. NASA’s Space Launch System, a behemoth rocket largely managed by Boeing, has been under construction for more than a decade to launch the Orion capsule to Gateway, where SpaceX’s Starship will pick up astronauts and land on the lunar surface. Artemis is a multibillion-dollar fandango, and until today, all of it sat next to other routine programs like the ISS, a $100 billion orbital research post that has housed rotating crews of international astronauts for over 20 years.

“This approach allows one mission directorate to operate in space, while the other builds space systems,” Melroy said.

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