Disney Affected by Softening Economy

1 Pages 330 Words

As of March 28, Walt Disney Co. announced plans to lay off 3% of it’s global workforce in response to the nations weakening economy that has already hurt advertising sales and could reach into tourism. Since 1974 when the company had to cut back due to gasoline shortages, Disney has been relatively immune to economic downturns because of the consumers continued spending on entertainment. “Cuts are always painful, but it is clearly a productive move by Disney to counter a softer economy and deliver on its goals of increasing returns,” Salomon Smith Barney’s Jill Krutick said.
“Tuesday’s news at Disney was delivered to employees just after 1 p.m. in an e-mail addressed ‘Dear Fellow Cast Members’ that was signed by Chairman Michael D. Eisner and Iger. Eisner and Iger said that ‘the economy has been more challenging in recent months and that we need to face up to the increasingly pressing challenges of the softening economic environment.’” Disney’s decision, affecting more that 3% of the companies 120,000 employees, followed several meetings over the last two weeks involving top decision makers. The cuts are expected through out the entire Walt Disney Co. and will start as a voluntary severance program but will continue into layoffs until the 4,000-employee target is met. If it comes down to layoffs, Disney officials said that “the bulk of the cuts will come in the company’s theme park division, where as many as 1,650 jobs have been targeted.” In Anaheim, Disneyland spokesman Ray Gomez said, “the layoffs include salaried employees as well as office and technical staff. Technical staff includes receptionists, phone operators, accounting clerks, secretaries and administrative assistants.” In Orlando, Disney World spokesman Bill Warren said, “the job trims will include a wide range of workers, from telephone operators to professional, including lawyers, public relations officials, managers, execut...