So what gives with 2000 Disney Californian employees being transferred to Florida?

[Bete]

I know there's a tax incentive but there has to be more to it. Does anyone know what the real scope is here?

 

[ThomasA]

“This new project will create a dynamic environment to support our expanding business — a brand-new regional campus which will be built in the vibrant Lake Nona community of Orlando,” Josh D’Amaro, chairman of Disney Parks, Experiences and Products, said. “This new regional campus gives us the opportunity to consolidate our teams and be more collaborative and impactful both from a creative and operational standpoint.”

I suppose being closer to WDW allows them to collaborate better, which makes sense.

 

[hhisc16]

I know there's a tax incentive but there has to be more to it. Does anyone know what the real scope is here?

 

[Brocktoon]

View attachment 624141

Yep ... most likely tax incentives is the main driver.

EDIT: to add also general operational and real estate costs are much lower in Florida than CA, so really coming down to $$$

 

[HopperFan]

And when you consolidate teams, you reduce costs as well. Not only do you need less so salary budget drops but forcing a move across the country to others will lead to many not taking the offer, so Disney doesn't have layoff costs. If they need to rehire in some spots in FL they will likely start at much lower pay.

 

[middlechild]

Keep in mind Iger was on a panel recommending to the Governor of California. He resigned when the Gov ignored all recommendations.

https://deadline.com/2020/10/bob-iger-quits-gavin-newsoms-task-force-economic-recovery-1234589999/#!

Was TWDC looking at tax burdens and working conditions and salaries long before? Most certainly. They review pure costs every year. Itching to leave? Would the workforce reluctant to leave delay things? Certainly. Until some percent of the workforce became willing to leave (Covid trigger anyone?)
Once the state locks down, and you shed lots of employees, and see FL up and running at less taxes and more respect for the CEO? Time to pull the trigger on a long planned move? Lots of reasons to leave the State of California, including taxes and living conditions and availability of workers. After all, third party vendors can be contracted globally, you do not need to be close to CalArts for talent.

 

[SteveH]

A friend is one of those 2,000, though I've not heard if he's made his official decision or not. He did head over a couple weeks ago with a few team members to check it out. Tax incentive is the biggest factor he's said, plus the rising costs and rules of doing business in California. The extended closure of Disneyland is probably an underlying factor as that directly impacted the business bottom line, though Disney won't say it out loud. There is a flow outbound from CA for numerous reasons, Disney is looking at the same factors as other corporations. They won't completely leave, but I don't think this 2,000 will be the last of the company to move out of CA either.

 

[StageTek]

People with 25 to 35 years with the company here in Los Angeles who are 40-60 years old, a home, kids in school, family nearby...

That's a tough decision to make. Lose what is a specialty job (Imagineering) that you've done for 30 years or move your entire life.

California is a hostile environment for business, for sure, so I understand the company's reasoning.

 

[mom2rtk]

I know there's a tax incentive but there has to be more to it. Does anyone know what the real scope is here?

Don’t underestimate the value of the tax incentives and business friendly environment.

 

[emilymad]

People with 25 to 35 years with the company here in Los Angeles who are 40-60 years old, a home, kids in school, family nearby...

That's a tough decision to make. Lose what is a specialty job (Imagineering) that you've done for 30 years or move your entire life.

California is a hostile environment for business, for sure, so I understand the company's reasoning.

Those are the exact people Disney wants to not pay though. High salary in CA vs a young, new hire in FL is a huge cost savings.

 

[SteveH]

@emilymad In a way yes, but they are also making moving pretty attractive, they don't want to lose all the talent. Experience in this matter does make a difference.

 

[Tigger's ally]

There is a flow outbound from CA for numerous reasons

B-I-N-G-O

 

[Tigger's ally]

@emilymad In a way yes, but they are also making moving pretty attractive, they don't want to lose all the talent. Experience in this matter does make a difference.

Yes, the cost of living combined with no state income tax means those moving would be sitting pretty well even with no additional incentives like moving expenses etc.

 

[middlechild]

No where is it written the salary has to remain the same. Based on a corporate sponsored move for my family from Boston area to Chicago. Previous to that move I had offered to move myself from Boston to Altamonte Springs FL area, was told my "Boston wages" would not continue in place of "Orlando wages". I didn't move then, but did take the funds to move to the Midwest years later with no salary adjustment.
Now there is very good reason to keep the salary the same, (employee happiness) just implying there is not a federal rule mandating it.

 

[SuzErwin]

It’s a layoff, pure and simple.

 

[HopperFan]

I don't believe this is a result of COVID, or California issues ......... this was likely in the works LONG ago. COVID has been the cover for so many decisions. While Disneyland is the original and always will be revered as such; it's not the flagship anymore. Disney World is bigger than any parks, with way more land, with way more hotels, with ability to expand and grow and add more amenities. It is more likely to have guests from all over the world than the other parks. It makes perfect sense for the Parks, Experiences and Products division to be centered in the Orlando area. It is between DL and DLP, a very central location for business travel. We have now been getting LOTS of clone attractions in the parks, less original creatives. From a business point of view it makes sense to consolidate, reduce the work force and locate it close to WDW. Taking emotion out, likely a good business move.

Yes, the cost of living combined with no state income tax means those moving would be sitting pretty well even with no additional incentives like moving expenses etc.

What seems forever ago my friend was transferred to Orlando. He bought a home in a new golf course community off Sand Lake. Most of his neighbors were executives/top management for Universal as it was being built. They all thought they were living the life, got so much more house for so much less. Paying no State Income Tax. Was it different than CA, sure but they were able to elevate their style of living, and happy they made the move.

Aside from the emotional part of a move like this, the financial move for individuals and the company can be quite large on so many levels.

 

[Tigger's ally]

It’s a layoff, pure and simple.

If it were pure and simple, they would just lay them off.....in California.

 

[perchy]

I heard about this and find it ironic. My husband lost his Florida job when they moved Animation to California in the 2000s.

 

[SuzErwin]

If it were pure and simple, they would just lay them off.....in California.

No, that would cost far more money.

A layoff in California would involve severance and unemployment benefits. Some of the employees they are losing have been there for decades and would receive quite the nice exit package.

I know people affected. None of them want to move. They are being forced to leave the company AND they receive no payouts or benefits. The people Disney wants to retain are being given dispensation to stay in CA.

So it’s a layoff in effect and Disney doesn’t have to pay out a cent. Quite diabolically genius.

 

[gharter]

Simple dollars and cents. Like other businesses, move people where it is cheaper. Those that don't move are let go. No severance as they chose not to move.