Disney Parks laying off 28,000 cast members

[RivShore]

Disney has been bleeding some talent over the last year. You cut peoples’ salaries, you give more people incentive to leave.

Also, you can’t just say they should take on more debt. Disney borrowing cost while not super high, have been accelerating rapidly. Any additional debt will really start to eat into revenues when we have a recovery.

And i recall reading that execs layoffs are included in the 28k. When that happens, other execs get added duties from those laid off. So now some on this thread want to reduce their pay while their workload increases. You do not retain good people doing that.

 

[RivShore]

Many companies have had pandemic plans in place for many years. I know, because I was involved in writing some of those plans. The problem is that some only looked at it from an operational standpoint and not a financial standpoint. Smart execs know their business and know the risks and plan accordingly. That doesn't mean ceasing all R&D, but it certainly plays into how they leverage themselves.

Every large company I have worked for has had, and regularly updated, their pandemic plan. I think post 9/11 more emphasis was put on such things.

As for Disney, we don't know if financial strength was part of it but, even if it was, there is no way it would have assumed a worldwide 7 month closure of almost every line of business they have. It probably would have assumed short term local closures and therefore their current cash and access to new cash would have covered it without a problem.

I don't think your truly grasping the scope of this unforeseen and long term problem.

ETA: spelling correction

 

[RivShore]

What is Disney supposed to do? Very few jobs come with a guarantee of lifetime employment. And even speaking as one who last August moved across the country, took a lower paying job so DW could get an entry level job at Disneyo only to be furloughed since March assuming a layoff will follow - Disney didn't ask us to do this. They weren't advertising for potential castmembers to uproot their lives to come work for them. It was a risk that we took.

As for people posting about the number of jobs available in central Florida - yes there are a good number of jobs available. But there are many more people who are job seeking than there are jobs. DW has been applying and the response rate is much worse than it was when she was first applying this time last year. And she is applying for all kinds of work, even jobs in the career that she did for 12 years prior to us moving to Florida.

But like others, if Disney called her back, she would happily go.

A few on here have said there's many job openings going unfilled and I just ran across the below which discusses how the sudden upheaval of the labor market has caused a mismatch of workers and job openings. it's a quick listen if your curious...

https://www.npr.org/2020/10/02/919720917/jobs-friday-the-worker-shortage-mysteryThe coronavirus pandemic has put millions of Americans out of work and in grave financial distress. At the same time, some employers claim that there's a worker shortage.

 

[TheMaxRebo]

So their cash on hand would only last 6 months, and that's just to fund the parks losses. And for those that say go raise more cash, with $70B of debt already on the books, that will become expensive (or impossible) and could very well lead the company into a death spiral.

I will say again, there are no easy answers to this mess.

Yeah, I think my official statement on 2020 is "I get it, but it sucks"

 

[TheMaxRebo]

Really though Disney isn't doing all they could.

They should be reducing ticket prices and resort prices. Havin enticements for people to come back.
show that they care about the loyal customers and loyal cast.

But my feeling is they want to hold on to the prices and now lower them because they still hold on to the illusions of things going back to normal and don't want to lower prices but just keep them at the same level.

Why would the reduce prices? Mostly what I am seeing lately is people complaining the lines are too long so they clearly don't need to attract more people to the parks

They are determining how to have the parks open while following guidlines, etc and then maximizing the $/person that is coming in. Lowering prices goes against that


Now, 6-12 months from now if they are able to operate the parks at close to normal capacity levels I can see packed deals and stuff like that as I don't think enough people are in position (either due to Covid concerns or $) to vacation at WDW at normal crowd levels

 

[TheMaxRebo]

Every large company I have worked for has had, and regularly updated, their pandemic plan. I think post 9/11 more emphasis was put on such things.

As for Disney, we don't know if financial strength was part of it but, even if it was, there is now way it would have assumed a worldwide 7 month closure of almost every line of business they have. It probably would have assumed short term local closures and therefore their current cash and access to new cash would have covered it without a problem.

I don't think your truly grasping the scope of this unforeseen and long term problem.

Yeah, this is a pretty much unprecedented event, at least since we have anything approaching the type and scale of the current global marketplace

I think most companies are able to manage a shock loss, but not this sustained crash that doesn't have a clear end in sight

Now things are being learned from this and different protection/insurance options will emerge ... though I am sure 50 years from know there will be another different, "unprecedented" event that comes along and impacts company

 

[New Mouse]

buts thats just business. Most companies are the same, its corporate PR for customers. I worked for a multinational company, who like Disney have a feel good PR image. But behind the scenes, as an employee, its just the same , employees are just a number, and any one can be fired at any time. No one is indispensable.

I guess maybe people are having their Disney bubble burst and seeing the difference between the cusromer image and the employee reality.

Thats more likely to sink them long term vs any loans they could take out. Their image is is the only thing that justifies their exorbitant prices.

 

[Starport Seven-Five]

Thats more likely to sink them long term vs any loans they could take out. Their image is is the only thing that justifies their exorbitant prices.

The quality of their product is what justifies their pricing.

 

[RamblingMad]

Thats more likely to sink them long term vs any loans they could take out. Their image is is the only thing that justifies their exorbitant prices.

Their branding is everything. It's what separates them from local carnivals.

 

[RamblingMad]

The quality of their product is what justifies their pricing.

In my experience, their quality of product is substandard for their pricing. I have received far better customer service outside of the Disney bubble for far less. I'd rather stay at a Red Carnation hotel than at Disney. Fairmont hotels are also superior. But those vacation trips catered more to adults than to kids. For kids there aren't a lot of options.

 

[Allison]

Every large company I have worked for has had, and regularly updated, their pandemic plan. I think post 9/11 more emphasis was put on such things.

As for Disney, we don't know if financial strength was part of it but, even if it was, there is now way it would have assumed a worldwide 7 month closure of almost every line of business they have. It probably would have assumed short term local closures and therefore their current cash and access to new cash would have covered it without a problem.

I don't think your truly grasping the scope of this unforeseen and long term problem.

I agree.

 

[Starport Seven-Five]

In my experience, their quality of product is substandard for their pricing. I have received far better customer service outside of the Disney bubble for far less. I'd rather stay at a Red Carnation hotel than at Disney. Fairmont hotels are also superior. But those vacation trips catered more to adults than to kids. For kids there aren't a lot of options.

I was talking about the parks primarily. I have also stayed at hotel properties that are a fraction of the cost and treated me like royalty.

 

[RamblingMad]

I was talking about the parks primarily. I have also stayed at hotel properties that are a fraction of the cost and treated me like royalty.

I don't find the parks that expensive. It's the resort pricing that comes across as ridiculous to me.

 

[JediKnightXan]

I am working at a company that has twice had to cut pay across the board, once in 2009-2012(ish I don't remember exactly when it ended), and then we had to cut pay again in March of this year, and that is still on going, however has been structured differently.

The tricky thing with across the board pay cuts is, that the folks that you want to stay have more incentive to now leave than the folks you, wouldn't mind as much they move on. Your top performers know their worth, and if their talents are still in demand elsewhere they may very well leave you. Where as folks whos skills are not as in high of demand won't have the options in the job market and will be forced to stay.

During the 2009 paycuts, my company had whole production teams leaving in departments that had the highest demand because there was work for them. So they went to competitors that were offering full pay for similar work, so we were losing the folks we needed most as we were not paying market rate for them anymore. Other departments had people standing around as there was no work at our company or elsewhere so they stayed put, there was some work but not 40 hours worth. That being said, there were folks that could have moved on that did stay as they believed in the company and what they were doing, so its not guaranteed folks will leave, but it is sure harder to get them to stay.

Our company is only 2000 people so no where near the same scale as Disney, and I am glad we did paycuts in 2009 as I'm sure without those I wouldn't still be with the company (Paycuts were not enough in 2009 and we did have layoffs but they were much less than they would have been otherwise).

This time around they have restructured the paycuts a bit to make it so that doesn't happen again (Hourly workers just lost hours, salaried got cuts, now work levels are picking up so the hourly folks are mostly back at full pay, salaried folks still have cuts however and is expected to last at least another 6 months, but no one really knows).

I would expect Disney did look at across the board paycuts, but they would likely have to last years as the business climate for them is not going to get better any time soon. So is it better for Disney to cut 28,000 jobs or ask 223,000 people to take cuts for years? Both options suck, and there isn't an easy answer, at least in my mind.

 

[hertamaniac]

I would expect Disney did look at across the board paycuts, but they would likely have to last years as the business climate for them is not going to get better any time soon. So is it better for Disney to cut 28,000 jobs or ask 223,000 people to take cuts for years? Both options suck, and there isn't an easy answer, at least in my mind.

I agree and also look for companies to slash 401-K matching if not done already; I am not sure if Disney offers this match.

 

[TheMaxRebo]

I am working at a company that has twice had to cut pay across the board, once in 2009-2012(ish I don't remember exactly when it ended), and then we had to cut pay again in March of this year, and that is still on going, however has been structured differently.

The tricky thing with across the board pay cuts is, that the folks that you want to stay have more incentive to now leave than the folks you, wouldn't mind as much they move on. Your top performers know their worth, and if their talents are still in demand elsewhere they may very well leave you. Where as folks whos skills are not as in high of demand won't have the options in the job market and will be forced to stay.

During the 2009 paycuts, my company had whole production teams leaving in departments that had the highest demand because there was work for them. So they went to competitors that were offering full pay for similar work, so we were losing the folks we needed most as we were not paying market rate for them anymore. Other departments had people standing around as there was no work at our company or elsewhere so they stayed put, there was some work but not 40 hours worth. That being said, there were folks that could have moved on that did stay as they believed in the company and what they were doing, so its not guaranteed folks will leave, but it is sure harder to get them to stay.

Our company is only 2000 people so no where near the same scale as Disney, and I am glad we did paycuts in 2009 as I'm sure without those I wouldn't still be with the company (Paycuts were not enough in 2009 and we did have layoffs but they were much less than they would have been otherwise).

This time around they have restructured the paycuts a bit to make it so that doesn't happen again (Hourly workers just lost hours, salaried got cuts, now work levels are picking up so the hourly folks are mostly back at full pay, salaried folks still have cuts however and is expected to last at least another 6 months, but no one really knows).

I would expect Disney did look at across the board paycuts, but they would likely have to last years as the business climate for them is not going to get better any time soon. So is it better for Disney to cut 28,000 jobs or ask 223,000 people to take cuts for years? Both options suck, and there isn't an easy answer, at least in my mind.

They did do paycuts earlier this year but recently reinstated the full pay. I believe it was for everyone level VP and up with the lower levels being a 20% and then it was gradually more as you moved up, up to Chapek taking 50% and Iger taking a 100% cut (of salary, not bonuses, stock incentives, etc)

I think they realized the point you made that if you kept them cut the top people might/would leave - I do think the optics of the timing of the reinstatement weren't great

 

[Brianstl]

They did do paycuts earlier this year but recently reinstated the full pay. I believe it was for everyone level VP and up with the lower levels being a 20% and then it was gradually more as you moved up, up to Chapek taking 50% and Iger taking a 100% cut (of salary, not bonuses, stock incentives, etc)

I think they realized the point you made that if you kept them cut the top people might/would leave - I do think the optics of the timing of the reinstatement weren't great

I don’t know how up to date the chart I was looking at was, but that was probably almost 150 people. Some of those VP weren’t making a ton of money especially when you consider the cost of living in souther California. Don’t get me wrong, they weren’t barely scraping by, but when you are paying housing cost in that region losing 20% of your $150,000 salary forces you to look for other options.

 

[Disney Bobby]

Every large company I have worked for has had, and regularly updated, their pandemic plan. I think post 9/11 more emphasis was put on such things.

As for Disney, we don't know if financial strength was part of it but, even if it was, there is no way it would have assumed a worldwide 7 month closure of almost every line of business they have. It probably would have assumed short term local closures and therefore their current cash and access to new cash would have covered it without a problem.

I don't think your truly grasping the scope of this unforeseen and long term problem.

ETA: spelling correction

Yet their stock price is still higher than it was ANYTIME in 2019 and was before these layoff were announced.

I don't believe for a second they had to do this to survive, especially considering 2/3rd were part time. I think they used this as an opportunity to lean up. The executive actions with their pay and "we'll see" attitude when it comes to bonuses don't add up to such dire forecasts.

 

[RamblingMad]

Yet their stock price is still higher than it was ANYTIME in 2019 and was before these layoff were announced.

I don't believe for a second they had to do this to survive, especially considering 2/3rd were part time. I think they used this as an opportunity to lean up. The executive actions with their pay and "we'll see" attitude when it comes to bonuses don't add up to such dire forecasts.

The stock price is really being propped up by Disney+.

 

[Brianstl]

Yet their stock price is still higher than it was ANYTIME in 2019 and was before these layoff were announced.

I don't believe for a second they had to do this to survive, especially considering 2/3rd were part time. I think they used this as an opportunity to lean up. The executive actions with their pay and "we'll see" attitude when it comes to bonuses don't add up to such dire forecasts.

The stock closed Friday down 20% from its 2019 high and 3% down since they announced the layoffs.