The cost of major company U-turns

Going back on a decision can be awkward. Especially if you’re a multi-billion-dollar company — caught in a political firestorm — with investors analysing every word.

Such is the pickle that Disney finds itself in this week, after deciding to bring back Jimmy Kimmel Live, one of the US’ most well-known talk shows.

“We have spent the last days having thoughtful conversations with Jimmy, and after those conversations, we reached the decision to return the show on Tuesday,” the firm said.

Disney, which owns the ABC network that runs Kimmel’s programme, suspended the presenter last week after he made on-air jokes about the assassination of conservative influencer Charlie Kirk.

The decision notably came after threats from the federal government, sparking concerns about free speech. President Donald Trump celebrated the show’s suspension.

“Congratulations to ABC for finally having the courage to do what had to be done. Kimmel has zero talent, and worse ratings than even Colbert, if that’s possible,” the president posted on his Truth Social platform.

Yet despite celebrations from some camps, the dismissal sparked anger among others. Disney’s share price slid in the wake of the announcements, hitting the company’s valuation.

The decision was condemned by some unions, as well as a number of politicians and Hollywood stars.

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“You can’t go around firing somebody because you’re fearful or trying to suck up to an authoritarian, criminal administration in the Oval Office,” claimed former late-night host David Letterman.

But — moral concern to one side — did Disney make a smart business choice in deciding to bring back Kimmel? And were they wise or silly to fire him in the first place? Although investors will place their bets on Wall Street in the coming days, Disney certainly isn’t the first company to wobble over a decision.

Euronews Business has compiled some major company U-turns.

In 2023, OpenAI was thrown into turmoil when the firm’s CEO and co-founder, Sam Altman, was ousted from his position for allegedly lying to the company board.

The members accused Altman of not being “consistently candid in his communications”, adding that they were no longer confident in his ability to lead the company.

Very quickly, however, the tone changed. In the wake of Altman’s departure, many employees at OpenAI threatened to resign, and co-founder and president Greg Brockman quit the firm.

With the ChatGPT maker fearing defections to Microsoft, Altman was then reinstated just a few days after his dismissal, later joined by Brockman.

In early 2024, an independent investigation concluded that Altman’s ouster was a “consequence of a breakdown in the relationship and loss of trust” between him and board, although it said that his conduct “did not mandate removal”.

OpenAI then went through a board shake-up, adding more female members, and it said it would be making “improvements” to the company’s governance structure.

To throw in some older examples, we can return to a gaffe made by Netflix. In the late 90s, the entertainment giant began as a DVD rental company, although its streaming service began to take off around a decade later.

When Netflix noticed this shift in the market, it told subscribers in 2011 that it would spin off its US disc delivery service and rebrand it as Qwikster. The company warned that, for customers still wanting to receive DVDs and Blu Ray discs by post, they would need two separate accounts.

Around a month later, customer disappointment nonetheless changed the firm’s tune.

“There is a difference between moving quickly, which Netflix has done very well for years, and moving too fast, which is what we did in this case,” said CEO Reed Hastings.

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At the time, Rolling Stones Magazine claimed that Qwikster may have been the “worst product launch since New Coke”.

The ‘New Coke’ mistake — an even older controversy — is also worth its own passing mention.

Back in 1985, Coca-Cola announced that it would be changing its original drink formula as it sought to compete with rival company Pepsi. The sweeter taste sparked up to 8,000 phone complaints a day, according to Time magazine. 79 days after it was axed, the traditional recipe made a comeback thanks to public pressure.

Shifts in company strategy can also be seen when it comes to principles around diversity, equity and inclusion (DEI). Much to the dismay of rights activists, many firms have been changing their messaging on inclusivity in recent years, seemingly a response to changes in the political climate.

Particularly in the US, conservative groups have harnessed the catchphrase “go woke, go broke”, calling on customers to boycott brands which promote progressive policies. Some right-wing groups hope that through public pressure, brands will scale back their support for gender, racial, and LGBTQ+ equality.

Companies such as Brown-Forman Corporation, creator of Jack Daniel’s whiskey, as well as motorcycle-maker Harley-Davidson have dropped DEI commitments. Beer brand Bud Light, which angered conservatives after working with transgender actress Dylan Mulvaney, has also moved away from loud messages on inclusivity, instead focusing on more traditional American branding.

Also feeding into the culture war narrative, pushed further into this debate by US President Donald Trump, are company stances on sustainability.

Since Trump took office with the pledge to “drill, baby drill”, a number of firms have backtracked on their environmental pledges. Oil giant BP, for example, said earlier this year that it would increase oil and gas spending while cutting renewable investment by around 70%.

Several automobile firms are also chopping and changing on EV targets, partly due to challenges linked to infrastructure and demand.

In the case of Disney and Kimmel, “the pressure from consumers but also from industry related unions was so great that it would not have been wise to stick with the decision”, said Joep Cornelissen, professor of corporate communication and management at Rotterdam School of Management, Erasmus University.

He told Euronews that the firm could now seek to explain the U-turn in different ways. “One could be a character development storyline, where it recognises that the decision was the wrong one and shows that it now stands behind the principle of free speech and the importance of satire in a free and democratic society.”

He continued: “They could also… say that their aim of taking the show offline had been taken with the American people in mind — as a transcendent goal — and with the critical moment now being gone, it is possible again for the show to be put back on air.”

Shortly after the opening bell on Wall Street, Disney shares rose around 1% on Tuesday.