Disney's top legal executive, Horacio Gutierrez, has alerted employees within the Legal and Global Affairs (LGA) division that the department is set for a significant transformation, involving “hard choices” and a reduction in its overall size. Gutierrez, the chief legal and global affairs officer, communicated these impending changes in a memo to staff, indicating that the department would be starting with a “blank slate” due to evolving technology and changing work methodologies.
In the memo, Gutierrez stated that the LGA division, currently comprising just under 1,000 employees worldwide, would become a “much smaller organization” and that some personnel would be affected. He emphasized that these decisions would involve careful consideration of resource allocation, including staffing investments. The memo did not specify the number of positions to be eliminated or provide a concrete timeline for these changes. Gutierrez reassured staff that the restructuring is not a reflection of the current division's performance or the talent within it, describing the team as “extraordinarily talented.”
The rationale behind this transformation, termed “LGA 2.0,” stems from the ongoing evolution of professions within the legal, government relations, and operations fields, driven by technological advancements and shifts in operating models. Gutierrez noted that technology is reshaping how legal work is conducted, prompting a re-evaluation of the department's structure, service delivery, knowledge sharing, collaboration methods, and technology utilization.
According to reports, the memo also suggested exploring automation of workflows through advanced technologies, alongside the implementation of self-service models, engagement with alternative legal providers, and the use of shared services and outsourcing. These potential changes align with Disney's broader company-wide efforts to reduce costs and invest in growth.
Disney has previously communicated to investors its intention to cut expenses across the enterprise. In its August 5 quarterly earnings release, the company stated it was exploring various cost-reduction measures, including labor and general and administrative expenses, to create capacity for growth. Chief Financial Officer Hugh Johnston echoed this sentiment, mentioning “meaningful reductions to cost, including labor and SG&A.”
The company has also highlighted the increasing role of technology and artificial intelligence in its operations. Disney’s earnings report indicated that AI is viewed as a significant opportunity, with applications already being explored in its parks and Imagineering departments. While emphasizing that AI is used to enhance creative processes, the company also reported $180 million in severance costs during the first nine months of fiscal year 2026, reflecting ongoing restructuring efforts.
Gutierrez joined Disney in 2021 from Spotify and continued in his role after Bob Iger returned as CEO. The restructuring within the legal department occurs amidst broader company-wide cost-cutting initiatives and a strategic focus on technological integration.