Disney’s top lawyer warned staff of “hard choices” ahead as the House of Mouse’s legal and government affairs division prepares to become a “much smaller organization” while the entertainment giant mulls layoffs across other parts of the company.
Horacio Gutierrez, Disney’s chief legal and global affairs officer said in a memo the department would “start with a blank slate” as technology changes how legal and other professional work gets done, Deadline first reported.
“How should LGA reinvent itself to best serve the Disney of tomorrow?” Gutierrez wrote in the memo, using the acronym for his department.
“To find the answer to that question, we are embarking on a transformation process that we are calling LGA 2.0,” he added.
Gutierrez reportedly warned employees the division, which numbers just under 1,000 staff around the world, would ultimately be smaller and that some workers would be affected.
“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,” the legal eagle wrote.
“Obviously, this will require hard choices about where and how we deploy our resources and investments, including our staffing investments.”
The memo did not specify how many positions would be eliminated, or give a timetable for cuts.
The changes were “not a reflection on the strength of LGA or its people today,” Gutierrez wrote, calling the team “extraordinarily talented” and noting that many employees had served Disney for decades.
But he said the professions inside LGA are being reshaped by technology and changing operating models.
“The reality is that the professions that comprise LGA — including legal, government relations, operations and others — are going through their own reinvention as technology reshapes how work gets done,” Gutierrez wrote.
The review will examine how the group is structured, delivers services, shares knowledge, collaborates and uses technology, according to the memo.
Deadline reported that Gutierrez also told staff the department would consider “automating certain workflows by leveraging the latest technologies,” along with self-service models, alternative legal providers, shared services and outsourcing.
The memo comes as Disney has already told investors it is looking to reduce labor costs more broadly as part of a companywide push to cut expenses and free up money for growth.
“We remain highly focused on reducing costs across the enterprise to create incremental capacity to invest for growth and are evaluating a variety of levers, including reductions in labor and [selling, general and administrative expenses],” Disney said in its Aug. 5 quarterly earnings release.
“We are mid-stream in this work and will provide future updates on our progress.”
Chief Financial Officer Hugh Johnston reinforced that message during the company’s earnings call, saying Disney was looking at “meaningful reductions to cost, including labor and SG&A.”
The automation language reported in the memo comes as Disney has increasingly emphasized technology and artificial intelligence across its businesses.
In its Aug. 5 earnings report, Disney said it viewed emerging technologies as a “significant opportunity” and detailed uses of AI in its parks and Imagineering operations.
“With AI, it isn’t simply about efficiency,” Disney said in the earnings release.
“We use it first and foremost to enhance a creative process that will always be human-centered, artist-driven, and creator-led.”
Its latest earnings release, however, shows the company incurred $180 million in severance costs during the first nine months of fiscal 2026.
The house that Walt built has said the cost review remains underway and that it will provide investors with further updates as the work progresses.
Gutierrez joined Disney from Spotify in 2021 during Bob Chapek’s tenure as CEO and remained in the top legal job after Bob Iger returned to run the company the following year.
Chapek recently resurfaced with a blistering account of his ouster, accusing Iger in a new memoir of working behind the scenes to undermine his leadership and engineering his removal less than three years after handpicking him as successor.
Chapek writes that he believes Iger played an “intentional and preconceived role” in ending his tenure, though he acknowledges he has no proof for some of his more incendiary suspicions about Iger’s motives.
The Post has sought comment from Disney.