FYI: More Cuts Coming

[larryz]

I've heard Easter is really a killer time to go.

It sure beats just hanging around...

oh! did I really just say that??? Sorry - I went to see Deadpool yesterday, and the effects still haven't worn off.

 

[larryz]

I read through these posts with all the hand wringing. I've got a very simple solution to it all. STOP GOING TO WDW! Problem solved. Every company in the country is working to do more with less people and Disney is not exempt. If you go to a restaurant or a hotel and end up not liking the food or service you don't keep going back do you? If you do keep going back then you must really like the service or the food and therefore have nothing to complain about. I'm guessing the majority of you have nothing to complain about and will be going back in the near future.

This is kind of like telling people who love potato chips, but who keep getting them stuck in their teeth, or occasionally find the green chips, to just quit eating them.

 

[ChloesDaddy]

It sure beats just hanging around...

oh! did I really just say that???

Sorry - I went to see Deadpool yesterday, and the effects still haven't worn off.

If you go "you know where" for saying it, I'll be right there with you for laughing.

I saw it yesterday too. Good thing Disney doesn't have the rights to that character.

 

[bcrook]

The old non-digital ticket books are way before my time but don't people seem to reminisce favourably about those?

Not anybody I know. I wouldn't want them back.

 

[leebee]

Iger took a measly 22.3 million bonus this year. He's hurting too, folks.

it looks like everyone at Disney is tightening their belts... Bob Iger's salary, bonus and stock options only came to $44.9M...times is tough...

THIS is what makes me angry. I am not saying that executives don't deserve salaries, but THIS MUCH? When they are cutting the jobs of people making $8.50 an hour? If my math is correct, $8.50 an hour, 40 hours a week, 50 weeks a year (because you can be SURE that these folks don't get paid vacation time) comes to $17,000 a year. If you cut 1000 full-time employees earning this pay wage, that's 17M dollars saved, BUT it's 5.3 million dollars LESS than Iger took as a BONUS this year. OK, I know that part of Iger's bonus probably came in options, not cash, but still... JEEEEEEZZZZZZ. He could save the company money, keep 1000 people employed full-time, and STILL take a bonus of $5,300,000! (Yes, I know it's not this simplistic if you take benefits into account, but still... a bonus of over $22,000,000? REALLY??)

If anything brings Disney down, it's going to be top-heavy management greed. I do NOT understand management taking these obscenely large bonuses while cutting jobs. If the company is in this kind of financial state, how do they justify these bonuses? As usual, the little guy bears the brunt and the rich get richer.

 

[CarolynU]

Early this month I wanted to eat the chicken at Cosmic's fairly late in the eve (around 9.30pm) According to guide it was open until 10pm, so I double checked with a CM that 10pm was closing and they said yep, so I watched MSEP and headed off. What I hadn't been told of course is that yes Cosmic's was open but all stations but the burger place were closed so no chicken, so only a third of Cosmic's was really open.
I was pretty fed up because I did not want a burger, and so did voice my concerns to a manager. She said and I quote that this was "due to cuts and costs as it involved extra labor keeping everything open."
Really Disney? You can't afford to give your guests a full counter service menu until closing time as it's too expensive?
Maybe it's me, but I wasn't impressed.

 

[mshanson3121]

THIS is what makes me angry. I am not saying that executives don't deserve salaries, but THIS MUCH? When they are cutting the jobs of people making $8.50 an hour? If my math is correct, $8.50 an hour, 40 hours a week, 50 weeks a year (because you can be SURE that these folks don't get paid vacation time) comes to $17,000 a year. If you cut 1000 full-time employees earning this pay wage, that's 17M dollars saved, BUT it's 5.3 million dollars LESS than Iger took as a BONUS this year. OK, I know that part of Iger's bonus probably came in options, not cash, but still... JEEEEEEZZZZZZ. He could save the company money, keep 1000 people employed full-time, and STILL take a bonus of $5,300,000! (Yes, I know it's not this simplistic if you take benefits into account, but still... a bonus of over $22,000,000? REALLY??)

If anything brings Disney down, it's going to be top-heavy management greed. I do NOT understand management taking these obscenely large bonuses while cutting jobs. If the company is in this kind of financial state, how do they justify these bonuses? As usual, the little guy bears the brunt and the rich get richer.

Exactly. I'm sorry... salaries like this tick me off. Not just at Disney, for anyone. There is NO need of it, for anybody. And it's pure greed, plain and simple. Movie stars, athletes, corporate big wigs... I don't care. No one needs or deserves a salary like that. And especially not at the cost of how Disney is doing it.

 

[mom2rtk]

THIS is what makes me angry. I am not saying that executives don't deserve salaries, but THIS MUCH? When they are cutting the jobs of people making $8.50 an hour? If my math is correct, $8.50 an hour, 40 hours a week, 50 weeks a year (because you can be SURE that these folks don't get paid vacation time) comes to $17,000 a year. If you cut 1000 full-time employees earning this pay wage, that's 17M dollars saved, BUT it's 5.3 million dollars LESS than Iger took as a BONUS this year. OK, I know that part of Iger's bonus probably came in options, not cash, but still... JEEEEEEZZZZZZ. He could save the company money, keep 1000 people employed full-time, and STILL take a bonus of $5,300,000! (Yes, I know it's not this simplistic if you take benefits into account, but still... a bonus of over $22,000,000? REALLY??)

If anything brings Disney down, it's going to be top-heavy management greed. I do NOT understand management taking these obscenely large bonuses while cutting jobs. If the company is in this kind of financial state, how do they justify these bonuses? As usual, the little guy bears the brunt and the rich get richer.

This is what I don't get. I have no idea what is "reasonable" for an executive bonus. I don't even want to get into that. But how can someone in charge of a company performing to a level that requires cuts like this even deserve a bonus that large?

 

[dkrauss]

This is what I don't get. I have no idea what is "reasonable" for an executive bonus. I don't even want to get into that. But how can someone in charge of a company performing to a level that requires cuts like this even deserve a bonus that large?

............and cuts from a project overseas that is impact folks here in the US................the executives get praise for maintaining a stock price.............and the working folks get it for their mistakes in China and the maintaining of that stock price.

Doug

 

[mom2rtk]

............and cuts from a project overseas that is impact folks here in the US................the executives get praise for maintaining a stock price.............and the working folks get it for their mistakes in China and the maintaining of that stock price.

Doug

I'm highly suspicious that this isn't just about Shanghai. I would love to know how much of this is burying part of that $2B spent on MM+.

 

[hiroMYhero]

It appears to be referring to FP loader CMs for attractions where FP isn't a necessity. So far, there are reports of Wishes, BatB, and Flights of Wonder not having FP availability beginning mid-April.

Updating my info:
It's Wishes, Flights of Wonder, and Illuminations that are not showing FP availability beginning April 19th.

BatB and Fantasmic! continue to offer FPs at least through April 19th ~ that's as far as my FP window has rolled.

 

[tentaguasu]

Agree with the concerns about greed at the top. I'm not against people getting wealthy by creating and managing major businesses, but at some point compensation is enough.

However, apart from that, cost cutting is often a mistake, in my opinion.

At some point "belt tightening" goes past unneeded excess and starts to hit critical functions, and then you get get yourself into a death spiral as a business.

People at the top can be blind to the real effects. Let me give you an example from a friend of mine.

She lives in a state where the politics of the moment have lead to "belt tightening" at the state level. From the outside, many people are happy. The budget is down, money is being saved, unnecessary state workers are being cut. Many people are happy, because it sounds good.

But from the inside, here's what's actually happening. They cut an administrative assistant from her department. He was paid very little because he was entry level and did tasks like photocopying. On the other hand, she's a highly trained and highly (within state parameters) compensated mid-career professional.

But here's the thing - the photocopying has to get done anyway. It's not something they can skip. So now, instead of paying small money to a person who needs a job, they're paying her vastly more money... to photocopy. The state is now paying $$$$ for each photocopy rather than $. AND her main job is getting done less well, because she's diverted from her main functions.

Point being, efficiency is not always gained just by "belt tightening." It seems like an easy fix, and sometimes it is, but often you're just slapping lipstick on a pig and pretending it's all OK. If Disney really is in a bind (and why they would be in one and the mismanagement around that is another story) then smarter to really bite a bullet and stop some operations altogether, but keep the ones you need running at full quality and capacity.

Of course, if you start cutting out things (e.g. cutting events, hours, etc.) then you start to degrade the breadth of the experience, and people stop coming. And workers leave the area because they can't count on you. And you get into a negative spiral.

My point? Manage the dang thing correctly, for crying out loud. Once you screw it up, there are no easy fixes.

 

[Mac30188]

The typical executive bonus justification during "difficult" financial times is: Bob Iger has done a fantastic job of overcoming issues to still maintain top shelf profitability. He has also turned Disney into the most powerful brand in the world. He is a special talent that needs to be retained to navigate Disney through the impending rough water. The market value for this type of executive is "x" and if we don't pay out the bonus, we risk Iger leaving Disney for Comcast. Therefore while Disney may not be in an ideal position to spend the money on his bonus, they feel they have no choice but to live up to the previously agreed upon contract, even during tough times, to ensure they don't lose this special talent and secure Disney's future success.

To a certain extent they are correct in finding people with successful experience leading a brand as large as Disney is extremely rare. He is a unique resource that therefore commands a very high salary due to the law of supply and demand. While capitalism is a great system, at times it can leave a bitter taste.

 

[NH-to-FL]

I found it interesting the Florida governor Rick Scott was at Epcot yesterday proclaiming that Florida had record levels of tourism in 2015. 105 million people visited the state, up from 82 million 5 years ago. He touted the job growth that went with the tourism increase.

http://www.wftv.com/news/local/florida-breaks-tourism-record-for-fifth-straight-year/92838103

An interesting question might be: What has Disney's payroll been in Florida year to year? I would also want to include the payroll of those doing all the construction going on around Disney. I know it is a complicated question.

Yes, the cutbacks are very unfortunate for the CM's involved and we will miss the pixie dust they sprinkled on us each day.

But I am curious if the cutback we just heard about, painful as it is, might be balanced with growth in employment in other areas?

 

[Budshark]

You do realize this is likely a lower level management issue right? I don't know Disney's titles but I doubt anyone down through the department managers were told to cut 20% of staff. They were told to reduce $x million.

The management of these divisions then made the decision to cut the headcount. They could have gone after efficiencies, lean projects to reduce waste, etc. I know for a fact the food service side is a mess of efficiency. But the easy, guaranteed (and imo lazy) answer is cut hours. More than likely there is compensation for achieving these cuts so they will take the quick and guaranteed.

In terms of executive compensation it doesn't bother me. Often the goals and objectives of the captain of a massive ship such as this are vastly different than daily operations. Their job is about 3-5 years from now. Not today.

Clearly Disney is steering the ship in a different direction. This is only part of the big picture.

 

[keaster]

Agree with the concerns about greed at the top. I'm not against people getting wealthy by creating and managing major businesses, but at some point compensation is enough.

However, apart from that, cost cutting is often a mistake, in my opinion.

At some point "belt tightening" goes past unneeded excess and starts to hit critical functions, and then you get get yourself into a death spiral as a business.

People at the top can be blind to the real effects. Let me give you an example from a friend of mine.

She lives in a state where the politics of the moment have lead to "belt tightening" at the state level. From the outside, many people are happy. The budget is down, money is being saved, unnecessary state workers are being cut. Many people are happy, because it sounds good.

But from the inside, here's what's actually happening. They cut an administrative assistant from her department. He was paid very little because he was entry level and did tasks like photocopying. On the other hand, she's a highly trained and highly (within state parameters) compensated mid-career professional.

But here's the thing - the photocopying has to get done anyway. It's not something they can skip. So now, instead of paying small money to a person who needs a job, they're paying her vastly more money... to photocopy. The state is now paying $$$$ for each photocopy rather than $. AND her main job is getting done less well, because she's diverted from my main functions.

Point being, efficiency is not always gained just by "belt tightening." It seems like an easy fix, and sometimes it is, but often you're just slapping lipstick on a pig and pretending it's all OK. If Disney really is in a bind (and why they would be in one and the mismanagement around that is another story) then smarter to really bite a bullet and stop some operations altogether, but keep the ones you need running at full quality and capacity.

Of course, if you start cutting out things (e.g. cutting events, hours, etc.) then you start to degrade the breadth of the experience, and people stop coming. And workers leave the area because they can't count on you. And you get into a negative spiral.

My point? Manage the dang thing correctly, for crying out loud. Once you screw it up, there are no easy fixes.

Exactly. When companies eliminate jobs, they don't eliminate the work that goes with it. They pass that work on to someone else who already has a full plate. The work eventually suffers for it because they now have to cover so many bases. I've been there, done that.

 

[mom2rtk]

You do realize this is likely a lower level management issue right? I don't know Disney's titles but I doubt anyone down through the department managers were told to cut 20% of staff. They were told to reduce $x million.

The management of these divisions then made the decision to cut the headcount. They could have gone after efficiencies, lean projects to reduce waste, etc. I know for a fact the food service side is a mess of efficiency. But the easy, guaranteed (and imo lazy) answer is cut hours. More than likely there is compensation for achieving these cuts so they will take the quick and guaranteed.

In terms of executive compensation it doesn't bother me. Often the goals and objectives of the captain of a massive ship such as this are vastly different than daily operations. Their job is about 3-5 years from now. Not today.

Clearly Disney is steering the ship in a different direction. This is only part of the big picture.

So who was in charge 3-5 years ago?

 

[ArwenMarie]

This is probably outside the scope of this thread, but multinational companies in other capitalistic countries manage to find qualified CEOs for far less compensation. It's usually measured in how much the CEO make versus the average worker at the same company...In the U.S. the average CEO makes 350 times more than the worker. In Germany, it's 147 times as much.

 

[Budshark]

So who was in charge 3-5 years ago?

That assumes they are not happy with the direction. I think record profits, revenue, and attendance would indicate the direction chosen 3-5 years ago is paying off.

Star Wars? Worked out well. Marvel universe. Just fine thank you. Theme parks? Record revenue while building a new park. Disney animation back on top. The bad? ESPN and cable. Imagineering cost control. And we know what they've done in both those areas.

The consensus may be that cuts stink and take the magic out of Disney. But to equate those decisions to bad management and CEO pay? Really? The charter of the Disney company as far as its board is measured by the owners does not include "have perfect theme parks and ensure every guest is sprinkled with magic". I'm pretty sure it's along the lines of make money while bringing joy and entertainment to millions. Can't argue that the last couple of years as a whole have been successful.

 

[BuckeyeBama]

Early this month I wanted to eat the chicken at Cosmic's fairly late in the eve (around 9.30pm) According to guide it was open until 10pm, so I double checked with a CM that 10pm was closing and they said yep, so I watched MSEP and headed off. What I hadn't been told of course is that yes Cosmic's was open but all stations but the burger place were closed so no chicken, so only a third of Cosmic's was really open.
I was pretty fed up because I did not want a burger, and so did voice my concerns to a manager. She said and I quote that this was "due to cuts and costs as it involved extra labor keeping everything open."
Really Disney? You can't afford to give your guests a full counter service menu until closing time as it's too expensive?
Maybe it's me, but I wasn't impressed.

They have been doing this at Cosmic Rays for as long as I can remember. It is very wasteful to keep all 3 stations open when so few people come in to eat that late, so you only keep the station open with the food choices which interest the highest percentage of guests.

When WDW is very crowded, more stations stay open later.