Disney Parks laying off 28,000 cast members

[Robert O.]

I’ve made friends with castmember a since I go to Disneyland so often. I hope to see them again.

 

[rteetz]

Yellow shoes department gone

 

[teruterubouzu]

Yellow shoes department gone

The entire department? Wow.

 

[rteetz]

The entire department? Wow.

Reportedly yes. Some CMs relocated but just insane.

 

[teruterubouzu]

Reportedly yes. Some CMs relocated but just insane.

Things like this lend credence to the idea that some of the this is long planned restructuring and not just for cost savings due to the hit of covid.

 

[New Mouse]

There is no way that executive pay cuts could cover 28,000 annual salaries and benefits. Does it look bad? Absolutely. But value of an employee is based on the cost to replace and current need. Disney clearly feels a need for their executives, not so much these 28K positions right now. And it's hard to argue.

Yes it's awful for all of the employees. My heart goes out to these people who are now facing financial hardship like so many others in our country. I hope they find satisfying employment and relief from the burden of financial uncertainty. But Disney hardly needs them right now. I will miss Yeehaw Bob, but POR may not reopen for a year or more. What is the point of keeping him on furlough? Let him take his act somewhere else if he can and maybe someday he will come back.

Anyway, some quick and dirty math. At $12/hr, every hour those 28K people worked was $392,000. They aren't all making Disney minimum, and I'm not including employer paid taxes or benefits, so true corporate expense every hour is probably over $500,000. That makes every 8 hour day a $4 million expense. On an annual basis, Chapek makes 2.5 million and Iger 3 million in salary. So Chapek was giving back 50%, 1.25 million and Iger all of his, 3 million. That's 4.25 million, or roughly 8.5 hours for 28k employees.

The average Disney exec makes between 150K and 200K, so a 25-30% cut was about 50K per year. Each executive cut paid for basically one and a half employees, provided the cut was permanent for a year. ($12X40=$480*4=$1920*12=$23,000. Plus 1/3 in taxes, benefits and employee expense on average is $34K for a $12/hr worker.

We don't know how many executives took pay cuts, but it wasn't 18,000. So, should Disney have restored Executive pay? Depends on how badly they want to retain those executives. Should they have used the executive pay cuts to keep on more employees? Depends if they need those employees. But the executive pay was a drop in the bucket compared to the total expense of 28,000 jobs.

I think our society is going to be very forgiving of companies for what happens during this pandemic. I don't think there is much of a downside to Disney to doing this, reputation or otherwise. It's sad, I feel awful, but in Disney's shoes? I'm making the same call right now.

For every 100k pay cut you could save 4 to 5 front line jobs annually. Even if you just save 5, Im not sure how any executive could have the balls to say nah id rather have my 100k.

 

[RivShore]

For every 100k pay cut you could save 4 to 5 front line jobs annually. Even if you just save 5, Im not sure how any executive could have the balls to say nah id rather have my 100k.

Even if the need for that front line job doesn't exist? One park is closed one is at 25%, unfortunately that means a whole lot of front line jobs aren't needed for the next year or more.

And at most, 100k would cover 2-3 jobs once you add in taxes, benefits and burdens. And they probably have less execs that could take a 100k paycut, than you would imagine.

There are no easy answers to this...

 

[MonkeyKnifeFight]

Many were still furloughed despite reopening. Go look at the list of still closed resorts and it’ll sink in a bit regarding how Disney can get by with so many less employees.

The amount of closed resorts is insane to think about. 911 was the last time any closed and that was just port Orleans. There are 18 non dvc resorts and only 5 are open. Something like 15,000 rooms or so and a lot of support staff is unneeded until there are enough people coming to Disney to open the resorts up.

 

[New Mouse]

Even if the need for that front line job doesn't exist? One park is closed one is at 25%, unfortunately that means a whole lot of front line jobs aren't needed for the next year or more.

And at most, 100k would cover 2-3 jobs once you add in taxes, benefits and burdens. And they probably have less execs that could take a 100k paycut, than you would imagine.

There are no easy answers to this...

Yes, someones livelihood is more important than an executive(s) having an extra $100k in their pockets. Sometimes you need to take one for the team.

 

[skeeter31]

Yes, someones livelihood is more important than an executive(s) having an extra $100k in their pockets. Sometimes you need to take one for the team.

And would you really have had any different opinion on TWDC if they had announced they were cutting $100k from 10 executive level employees and only laying off 27,980 employees?

It’s just not feasible in what you’re saying. It’s the end of the fiscal year, Disney most likely was preparing to lay these staff off regardless at this point (obviously not regardless of COVID, I mean since COVID they had made their decision to go this route). If executives were to truly take pay cuts, that money most likely would have just been reabsorbed into the company and no jobs would have been saved.

This is happening around the country right now. Thousands and thousands of organizations are laying off staff, having pay cuts, extended furlough. It sucks all around. People take it differently here about Disney because they feel an attachment to these CMs. They’re almost family. But unfortunately, it’s a business.

 

[BK2014]

Yes, someones livelihood is more important than an executive(s) having an extra $100k in their pockets. Sometimes you need to take one for the team.

How long should they pay someone who isn't working, whose position is not currently needed, and may never be needed again? It's a bad situation and really unfortunate for the castmembers, but businesses should not be expected to pay for employees they do not need.

 

[RivShore]

Yes, someones livelihood is more important than an executive(s) having an extra $100k in their pockets. Sometimes you need to take one for the team.

And if there is no work for them, you would have the company pay them to sit home?

 

[Takket]

stuff i'm reading on twitter.... so take it with a grain of salt.

Photopass in Disneyland is gone.
Photopass at WDW reduced about 90%
Mini-Van drives all eliminated.

I'm in the camp of this being a "planned restructuring" that the virus exacerbated, so they just went ahead and decided to take the whole PR hit in one blast. If you are cutting because business is slow you take a few people from here, a few from there.... you don't just ax whole departments. Seems to me that Chapek isn't interested in anyone not loading you onto a ride, cleaning your room, or serving your food. Extra experiences, embellishments, that little sprinkle of magic that sets Disney apart........... gone.

 

[New Mouse]

And if there is no work for them, you would have the company pay them to sit home?

If they are getting the money from a different indivuduals salary it doesnt matter if there is work for them, you can have then greeting in the parks. They are paid for.

To the person who asked what difference 20 people would make in my opinion of the situation...0...but those 20 people would still be able to support their families so id imagine it would be worth it to them.

Why should execs be able to just skirt through this like business as usual?

 

[Brianstl]

Yes, someones livelihood is more important than an executive(s) having an extra $100k in their pockets. Sometimes you need to take one for the team.

Well, you will be happy to know those greedy evil executives aren’t all escaping the layoffs either. All indications are these cuts are happening throughout much of The Walt Disney Company food chain.

 

[Starport Seven-Five]

stuff i'm reading on twitter.... so take it with a grain of salt.

Photopass in Disneyland is gone.
Photopass at WDW reduced about 90%
Mini-Van drives all eliminated.

I'm in the camp of this being a "planned restructuring" that the virus exacerbated, so they just went ahead and decided to take the whole PR hit in one blast. If you are cutting because business is slow you take a few people from here, a few from there.... you don't just ax whole departments. Seems to me that Chapek isn't interested in anyone not loading you onto a ride, cleaning your room, or serving your food. Extra experiences, embellishments, that little sprinkle of magic that sets Disney apart........... gone.

Or, there finances are this bad due to the reduced volume of people coming to the parks and resorts. This is very much as a "batten down the hatches" type of scenario as we will not be close to "normal" for at least a year. I don't think we can read too much into anything regarding how companies will look coming out of this as many are just trying to survive.

 

[New Mouse]

Or, there finances are this bad due to the reduced volume of people coming to the parks and resorts. This is very much as a "batten down the hatches" type of scenario as we will not be close to "normal" for at least a year. I don't think we can read too much into anything regarding how companies will look coming out of this as many are just trying to survive.

Its not sustainable with the prices they charge. People will just stop going, making the problems even worse.

 

[Sandisw]

The numbers you are using are out of date. It assumes that all the employees furloughed were regular park cast members 2/3rds of those furloughed were par time. which was not the case. The lowest paid regular park full time cast members were making a starting salary of $27,040 when the furlough started. That increased to $29,120 today.

I want to add that some of those furloughed back then...and still furloughed worked in other divisions of Disney like where my DD works in NYC...who is currently furloughed now and crossing fingers she doesn’t end up laid off...

Many of them were full time and professionals so salaries were higher for sure.

 

[rteetz]

https://twitter.com/x/status/1311819466725093376

 

[skeeter31]

Its not sustainable with the prices they charge. People will just stop going, making the problems even worse.

Are you frequenting forums for every other major corporation in the country complaining about their practices in this time as well? Or is it just Disney that riles you up? Because this is happening basically everywhere. Again, it only feels worse because of the love we have for CMs and the magic they provide. But there are people in every sector being effected like this.