Bob Iger vs. Jack Welsh: Who Fired More Employees?
Is it fair to compare current Walt Disney Co. (NYSE:DIS) CEO Bob Iger to former General Electric Co. (NYSE:GE) CEO Jack Welsh? Walsh made a legacy for himself by increasing GE’s value during his leadership, but he also earned the nickname “Neutron Jack” for his staffing cuts. Iger wants to make a legacy for himself as well.
Variety notes that Disney is almost twice as valuable as when Iger took over as CEO. However, Welsh increased GE’s value from $12 billion in 1981 to around $280 billion by 1998, according to BusinessWeek. Welsh retired in 2001, leaving behind a 4,000% increase in GE stock value. Maybe the comparison between Iger and Welsh is apples to oranges.
During Welsh’s leadership, GE cut jobs by 120,000. Welsh explained why in an interview with CBS News. “I came into a company that had at least an extra 100,000, maybe 150,000 extra people. It was the early ’80s. We were making television sets in Syracuse, N.Y., and the Japanese were selling them at the mall cheaper than we were making them.” He continued, “Now, it didn’t take a genius to shut that operation down. And we took out lots and lots of people. And people started, the media labeled me Neutron Jack. It’s awful.” Now job cuts are coming for Disney…
Iger has made some strong acquisitions during his run as Disney CEO, LucasFilm, Pixar Animation Studios and Marvel Entertainment have all come under Disney ownership. Now the job cuts have to come to these talented, once independent companies as they are absorbed into Disney’s existing structure. The company is now worth approximately $109.19 billion, compared to around $60 billion when Iger became CEO. Iger has the media properties he wants; it is time to strip them of unnecessary costs and watch Disney’s stock price climb before a successor takes over in 2015.
Disney has already cut 400 jobs over the past six months, according to Vanity. As part of the restructuring, more jobs are expected to be lost. While Iger will certainly not come close to Neutron Jack in the number of job cuts, he is faced with a different problem — expanding Disney, not stemming a massive lost of profitability through underperforming divisions like the ones Welsh had to manage with GE. Cutting jobs when a company is losing money because of competition is one thing, but knowing when to cut jobs when a company is expanding and profitable is another. The comparison between Welsh and Iger really is apples to oranges.
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