Disney to accelerate job layoffs (Orlando Sentinel)

[crazy4wdw]

From the Orlando Sentinel:

Disney plans layoffs, streamlining as economy eats into revenue
Jason Garcia | Sentinel Staff Writer
February 19, 2009

The Walt Disney Co. on Wednesday said it will eliminate an undisclosed number of jobs as part of a sweeping corporate overhaul at its domestic resorts, which includes plans to combine back-office operations at Walt Disney World and Disneyland.

Disney would not say how many jobs it intends to cut or how much money it expects to save through the moves. The company employs about 80,000 people at its U.S. resorts, including 62,000 in Central Florida.

With the shake-up, Disney will consolidate East and West Coast "operating infrastructure" -- responsibilities ranging from procurement to menu-planning to merchandise -- under Al Weiss, the president of worldwide operations for Walt Disney Parks and Resorts.

The plans also call for uniting disparate creative engineering and business-development units under single executives.

Disney said it was forced to speed up corporate streamlining plans by the worsening global recession, which has eroded revenue at its theme parks and elsewhere across the Burbank, Calif.-company's media and entertainment empire.

"These changes are essential to maintaining our leadership position in family tourism and reflect today's economic realities," Parks and Resorts Chairman Jay Rasulo said in the statement.

In a separate memo to employees Wednesday, Rasulo wrote that "organization changes require difficult decisions, including the elimination of some roles."

'Not made lightly'

"These decisions were not made lightly and we know this will be a challenging transition. The people affected are our friends and colleagues, and they have made valuable contributions," Rasulo added in the memo.

The announcement comes the same month Disney revealed that its first-quarter profits fell 32 percent. Operating profit in the parks-and-resorts division fell 24 percent during the three-month period, which ended Dec. 27.

It also follows Disney's decision last month to offer buyouts to more than 600 executives at its domestic resorts. A spokesman said Disney received "a satisfactory response" to the offer, though Disney would not say how many executives took the buyouts.

The risk of over-cutting

John Gerner, managing director of Leisure Business Advisors, a Richmond, Va., consultant firm, said Disney likely will be able to make deep cost cuts by consolidating operations.

"I think it definitely has quite a lot of potential for savings. . . . As far as the theme parks go, there's definitely economies of scale in being able to merge all those operations together to the extent that they can and centralize them," Gerner said.

But Gerner said Disney, which relies on a constant infusion of fresh content to fuel everything from park attendance to DVD sales, must not cut too deeply in creative areas.

"They've got to be careful because there are so many very specialized people that work for Disney, especially on the creative side, that would be very difficult to replace once things turn around," Gerner said. "That's what a lot of creative companies, not only Disney, have to rely on."

In addition to steering "operating infrastructure" at the Orlando and Anaheim, Calif., parks through Weiss, Disney said that its Walt Disney Imagineering unit would be reorganized into a single practice reporting to Bruce Vaughn, executive vice president and chief creative executive, and Craig Russell, executive vice president and chief design and project-delivery executive.

A new 'global' team

The company also said it would establish a new "Global Business Development team" headed by Executive Vice President Nick Franklin, which will be charged with combining existing business and real-estate development functions. The unit will be responsible for focusing growth strategies at existing parks-and-resorts businesses and identifying new opportunities around the globe.

Vaughn, Russell and Franklin all are based in California.

Disney said other departments will make "appropriate changes" in the coming weeks.

As an example of what it hopes to achieve through the streamlining, Disney pointed to the simultaneous development of Toy Story Mania! attractions at both Disney's Hollywood Studios in Orlando and Disney's California Adventure in Anaheim, which helped hold down design costs.

The corporate overhaul means fewer employees will now report directly to Meg Crofton, president of Walt Disney World, and Ed Grier, president of Disneyland.

Jason Garcia can be reached at jrgarcia@orlandosentinel.com or 407-420-5414.

 

[Mouseaholic!!!]

Don't mean to start an argument....but who is surprised?

 

[jimmymac]

Not here. I think a minority of us have been saying this for months but a lot of folks were seeing things through their Disney colored glasses - everything was magic and pixie dust. I bet there are still some out there

 

[wdwpins]

Wouldn't it be better to ask all employees to take a paycut and then lower prices, and keep the business going (by attracting customers with those lower prices), rather than to do the opposite, run the company into the ground and then declare bankruptcy?

Is there some kind of mindset that goes against taking a reduced salary or adjusting prices when the country is in a recession? Is it emasculating to do so?

As a former passholder, I saw reduced attendance in the parks (and I went very often, probably too often) as early as May and June of 2008, when kids were out of school. I thought that once kids were out for the summer the parks would be jammed but I was often walking onto headliner attractions rather than having to get a fastpass. Didn't any Disney higher-ups see this too?

When they tally up the attendance records and see that business is down, who then makes the decision to raise the price of a white glove pin from $15 to $16.95??

 

[crazy4wdw]

More Information:

LOS ANGELES (Reuters) – Walt Disney Co said on Wednesday it will consolidate some "back of house" operations, including menu planning and ride design, at its two U.S. theme parks to try to offset the effects of the global economic downturn.

The reorganization is effective immediately and will result in new job cuts, but the company would not specify how many.

Disney Parks Chairman Jay Rasulo said "economic realities" required the company to focus and streamline its operations in a way that "eliminates redundancies."

Earlier this month, Disney's parks division reported a 24 percent drop in quarterly operating income and a 4 percent revenue decline in part due to slowing consumer spending.

The new organization calls for Walt Disney Imagineering, the parks' engineering and design teams, to be consolidated into a single group that handles attractions for all parks.

The company also will create a single domestic group to handle behind-the-scenes services such as maintenance, menu planning and security, for Walt Disney World and Disneyland.

Last month, Disney Parks and Resorts offered voluntary buyouts to 600 parks executives at the U.S. parks to trim its administrative costs as hotel bookings slipped at its parks.

The company received "a satisfactory response" to that offer but did not divulge the number of executive positions that would be eliminated.

 

[crazy4wdw]

Two of the local Orlando tv stations have information regarding this story:

http://www.wftv.com/video/18748969/index.html

http://www.wesh.com/video/18748514/index.html

 

[DisFlan]

Don't mean to start an argument....but who is surprised?

Not me. Something of this type was bound to happen at some point this year.


DisFlan

 

[TheRustyScupper]

1) The consolidation is new.
2) The manpower reduction is not.
3) They have been cutting people and hours since last November.
4) They are just acknowledging it publicly.

 

[lugnut33]

LOS ANGELES (Reuters) – Walt Disney Co said on Wednesday it will consolidate some "back of house" operations, including menu planning and ride design, at its two U.S. theme parks to try to offset the effects of the global economic downturn.

Oh dear me, the same people who have dumbed down the restaurant menus in order to obtain more profit from the dining plan will now be designing rides!!

I can see it now, the new Space Mountain at WDW will only last 10 seconds in a response to "park patron demand" for more rides.

 

[zulemara]

Oh dear me, the same people who have dumbed down the restaurant menus in order to obtain more profit from the dining plan will now be designing rides!!

I can see it now, the new Space Mountain at WDW will only last 10 seconds in a response to "park patron demand" for more rides.

 

[tjkraz]

Oh dear me, the same people who have dumbed down the restaurant menus in order to obtain more profit from the dining plan will now be designing rides!!

I can see it now, the new Space Mountain at WDW will only last 10 seconds in a response to "park patron demand" for more rides.

I don't think it means that the same people will be working on restaurant menus and park attractions...rather that the menus for both WDW and DL will be managed by one group (rather than separately) and the same for the rides.

I really hope there aren't many job losses due to this. The economy has been hard on everyone and Disney certainly isn't exempt.

That said, when I made my first trip to DL a few months back I was shocked at how much I had taken for granted at WDW that was just...different...at DL. Now, I'm not saying things need to be identical at both locations. But I can't be the only guest who was thrown for a loop by the inconsistencies. So this may yield some promising results.

I'll say this--I'd rather see Disney get creative about the ways they are saving money rather than simply slashing staffing across the board and asking everyone to do more. That's when the cracks really begin to show.

Now if only they would realize that the theme park merchandise is one area things should NOT be identical for both Resorts.

 

[DisFlan]

Being the Disney food-centric person that I am...I hope I'm wrong, but I'm thinking the "menu planning consolidation" part of this plan may not be a plus for WDW foodies.


DisFlan

 

[lugnut33]

Being the Disney food-centric person that I am...I hope I'm wrong, but I'm thinking the "menu planning consolidation" part of this plan may not be a plus for WDW foodies.


DisFlan

Le Cellier will now be serving only Mac-n-Cheese, Chix Tenders, or Smuckers Crustless Peanutbutter and Jelly Sandwiches. Again though, this is due to demand so it's OK.

 

[Horace Horsecollar]

Le Cellier will now be serving only Mac-n-Cheese, Chix Tenders, or Smuckers Crustless Peanutbutter and Jelly Sandwiches. Again though, this is due to demand so it's OK.

That would be an improvement over my last meal at Le Cellier a few months ago.

 

[lovemickeyshouse]

I predict Disney will be out of business in 10 years at this rate.

 

[lugnut33]

That would be an improvement over my last meal at Le Cellier a few months ago.

Ouch!!!

 

[Mouseaholic!!!]

That would be an improvement over my last meal at Le Cellier a few months ago.

DITTO -

OMG - My DH LIVES for the onion soup there. Last trip.....a teeny cup with a tiny piece of bread and a sliver....honestly a sliver of cheese. Really cheep.

I had to return my first course because it was covered with pepper and was impossible to eat.

When we left, DH asked for the Managers name....the ladies at the front desk gave us a card and asked if there was a problem. We were polite and just said yes. They said....."it's happening all the time now".

Oh yes, beginning about 30 minutes after dinner....I get very sick and was.....ummmmmm.....completely empty when I left EPCOT that night.

Le Cellier....never again.

 

[crazy4wdw]

From the Orlando Sentinel:

Disney announces new executive assignments

Jason Garcia | Sentinel Staff Writer
5:10 PM EST, February 19, 2009

The number two executive at Walt Disney World is being bumped up to run newly merged resort functions between Orlando and Anaheim, Calif.

Erin Wallace, who has been the senior vice president of operations at Disney World since August 2006, moves to the new position senior vice president of operations integration/line of business for Walt Disney Parks and Resorts.

Disney announced the move Thursday, one day after unveiling a broad restructuring of its U.S. theme parks designed to consolidate operations between Disney World and Disneyland. The company, which has been hit hard by a sharp drop in consumer spending, will cut an undisclosed number of jobs in the coming weeks as part of the streamlining.

In her new role, Wallace will oversee a series of combined functions at Disney's domestic parks. They include merchandise development, entertainment and imaging, attractions, lodging, animal programs and environmental initiatives.

Wallace, 49, has been with Disney for more than 23 years. She began in the resort's industrial engineering department, and her assignments have included vice president in charge of the Magic Kingdom, Disney's flagship theme park.

Wallace will report to Al Weiss, president of worldwide operations at Disney's parks and resorts division.

Disney also said Thursday that it has named Dan Cockerell to run Epcot, the second-busiest of Walt Disney World's four theme parks. Cockerell, previously a general manager in the Magic Kingdom, succeeds Jim MacPhee, who will now oversee special projects at the Orlando resort.

Each of the vice presidents overseeing individual theme parks will continue to report directly to Walt Disney World President Meg Crofton. So will MacPhee and the executives in charge of Downtown Disney, golf operations, sports facilities and transportation.

Crofton will continue to report to Weiss.

At the same time as it combines operational functions at its U.S. parks, Disney is also consolidating real-estate and business development functions into one unit and all of Walt Disney Imagineering, the company's attraction-design arm, into another unit.

The goal, a Disney spokesman said, is to develop "a three-pronged team" within Disney's parks division, with one charged with developing new initiatives such as new parks and expansions, another with designing and building the infrastructure, and the third with running day-to-day operations.

Disney's parks division, which accounts for more than a quarter of the Disney Co.'s total revenue, has taken other streamlining steps. Last week, the division announced that Disney Cruise Line and the Adventures by Disney packaged-tour business would be merged into a single department "focused on operating the businesses that take the Disney brand to new places."

 

[disney1990]

Wouldn't it be better to ask all employees to take a paycut and then lower prices, and keep the business going (by attracting customers with those lower prices), rather than to do the opposite, run the company into the ground and then declare bankruptcy?

Is there some kind of mindset that goes against taking a reduced salary or adjusting prices when the country is in a recession? Is it emasculating to do so?

The low level Cast Members can't afford a pay cut. They don't make a living salary now.

 

[doubletrouble_vb]

They should think about expanding the Florida Resident deals to Georgia and Alabama...especially the ticket deals. If I thought I could get a discounted annual pass I might go to Disney this year...right now the finances say the best bang for my buck is some place I haven't visited so often. And hey...homogenizing the menus might be Disney's way of spreading some of the wealth to non-Disney venues. If people want a really nice meal they'll go offsite.