WDW layoffs

[Backstage_Gal]

There will not be any follow up from Disney. We were told that some took the offer, and some were laid off, but NEVER all of them. You can't run the company without people at the helm.
We were also told that would be no announcement about who left the company (voluntary or not), as they were friends and collegues, and that would be not the right thing to do.

That is the official word I got as a Disney CM yesterday.

 

[Horace Horsecollar]

My interpretation of the buy-out package was that it was offered to 619 management level employees, and WDW would have been happy if all of them had accepted it.

That's not how voluntary buyouts work.

A company identifies a job category that is deemed to have too many people performing a similar function. Companies tend to use buy-outs only for higher level salaried employees. The buyout packages are offered uniformly to everyone who fits the criteria. Then nobody can charge age discrimination or any other kind of discrimination. It's much better for morale than lay-offs. And, frankly, it's a perk for having made it to a high-level position.

Human Resources consultants are typically brought in to structure the package so that it achieves the desired results, which could be 10% or 20% or some other percentage.

After the buy-out deadline, there's a reorganization. The goal is to perform the same work more efficiently, often with a "flatter" organization, or with high-level managers having multiple responsibilities, or with the removal of perceived redundancy.

That's what we're seeing now with Disney Parks & Resorts.

But I agree, the target was the removal of about 600 high paying salaries from the books. This is what the shareholders want to hear in order to keep the share price up there.

The target was clearly not to lose every experienced executive at WDW! The shareholders don't want to see the company run without any experienced leaders!

Disney never said what the goal was, but 60 is more likely than 600.

Over time, especially in good times, management structures tend to grow top heavy (and too expensive). Executives build "empires" that increase their status, without actually accomplishing much for customers or shareholders. Periodic housecleaning can be a good thing -- as long it cuts the fat, not the meat of an organization.

 

[redrosesix]

That's not how voluntary buyouts work.

A company identifies a job category that is deemed to have too many people performing a similar function. Companies tend to use buy-outs only for higher level salaried employees. The buyout packages are offered uniformly to everyone who fits the criteria. Then nobody can charge age discrimination or any other kind of discrimination. It's much better for morale than lay-offs. And, frankly, it's a perk for having made it to a high-level position.

Human Resources consultants are typically brought in to structure the package so that it achieves the desired results, which could be 10% or 20% or some other percentage.

After the buy-out deadline, there's a reorganization. The goal is to perform the same work more efficiently, often with a "flatter" organization or with high-level managers having multiple responsibilities.

That's what we're seeing now with Disney Parks & Resorts.



The target was clearly not to lose every experienced executive at WDW! The shareholders don't want to see the company run without any experienced leaders!

Disney never said what the goal was, but 60 is more likely than 600.

Over time, especially in good times, management structures tend to grow top heavy (and too expensive). Executives build "empires" that increase their status, without actually accomplishing much for customers or shareholders. Periodic housecleaning can be a good thing -- as long it cuts the fat, not the meat of an organization.

Well...you seem to be very knowledgeable about this topic from the US perspective. I'll accept your word for it.

But, the interpretation I had was based on what I read/heard in the Canadian business news. So, there are obviously differences cross-border.

So, maybe you can answer this re the 619 executives that the buy-out was offered to: what percentage of that management level would they comprise? I'd have thought that wouldn't be all of them.

 

[Horace Horsecollar]

But, the interpretation I had was based on what I read/heard in the Canadian business news. So, there are obviously differences cross-border.

Can you provide a link to a Canadian business publication whose writers don't understand how voluntary buyout packages work in the United States?

While there are differences in labor laws and culture on either side of the border, I would be surprised if "voluntary buyout packages" in Canada mean that a company seeks to eliminate 100% of the employees to whom it's offered, and gets rid of everyone whether they accept the voluntary package or not. That wouldn't be very voluntary.

So, maybe you can answer this re the 619 executives that the buy-out was offered to: what percentage of that management level would they comprise? I'd have thought that wouldn't be all of them.

As I wrote previously, voluntary buyout packages are offered uniformly to everyone who meets the criteria -- which means 100%. Disney hasn't announced the criteria, so we can only guess. It could be every VP and department head in Disney Parks & Resorts, or some categories could be uniformly excluded (such as Parks & Resorts' online services management), if categories are growing or are considered not to need culling.

 

[redrosesix]

I think in Canada, the tendency has been to offer early retirement -- but the employees aren't given a choice.

 

[CanadianGuy]

This paragraph was in a good number of the stories... on both sides of the border.

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 declined to say how many executives took the buyouts.

"Satisfactory response" is ultimately an 'unknown number' - however to presume that it is 600 or even 500 is folly.

That was quoted in this article:
http://www.orlandosentinel.com/business/orl-bk-disney-reorg-021909,0,1094627.story

 

[Mouseaholic!!!]

Stop and use some common sense for a change. If all theme park execs that were offered the buyout are no longer with the company then who is running the parks?

Have you read any of the articles about the restructuring? It has been reported that Dan Cockerell is now VP of Epcot and Jim McPhee is now overseeing walt disney world special events. Both were offered the buyout package and clearly did not take it, and clearly both are still with the company. The other three park VPs were also offered the buyout and all are still VP of their respective parks with some added responsibility.

Either jimmymac or the AP is flat out wrong.

I suppose you have not heard of hiring back as consultants - with no benefits. Ask a few ABC staffers about entire departments being eliminated this way.

 

[jimmymac]

Stop and use some common sense for a change. If all theme park execs that were offered the buyout are no longer with the company then who is running the parks?

Have you read any of the articles about the restructuring? It has been reported that Dan Cockerell is now VP of Epcot and Jim McPhee is now overseeing walt disney world special events. Both were offered the buyout package and clearly did not take it, and clearly both are still with the company. The other three park VPs were also offered the buyout and all are still VP of their respective parks with some added responsibility.

Either jimmymac or the AP is flat out wrong.

The article did not say that every Disney management person was offered a buyout; only that 619 selected were. Obviously no company could run if the entire management staff were let go. If the AP article were incorrect, I'm fairly sure that Disney would have demanded a retraction. As such a retraction has yet to be published, I have to believe that AP is standing by its story

 

[doconeill]

The article did not say that every Disney management person was offered a buyout; only that 619 selected were. Obviously no company could run if the entire management staff were let go. If the AP article were incorrect, I'm fairly sure that Disney would have demanded a retraction. As such a retraction has yet to be published, I have to believe that AP is standing by its story

I never thought the 619 included ALL management. In fact, I'm betting 619 did not include high-level management at all, but low- and mid-level management positions, especially relating to the redundant positions from the planned consolidation. It certainly isn't all of management, and they would not offer the package to people who's positions were vital and not readily backfilled by others.

And as stated, Disney would NOT expect or actually WANT 100% acceptance. If they wanted to get rid of 100% of who they offered to and were going to lay them off anyways if they didn't, they wouldn't offer - they'd just lay them off with a severance package, no choice in the matter.

They expect they need to eliminate a certain percentage - say 30%. If 30% take the offer, great - no layoffs, although positions will likely move around. If less than 30% take the offer, then they will lay off to reach 30%, and too bad for those - they likely wouldn't get the same package (but they might anyways) - but higher management picks and chooses. If they get more than 30%, the can either choose to accept more than 30%, or deny some of them based on some predetermined criteria (often seniority).

 

[Horace Horsecollar]

The article did not say that every Disney management person was offered a buyout; only that 619 selected were.

Please reread this entire thread to understand how voluntary separation packages are implemented.

Obviously no company could run if the entire management staff were let go.

Again, we're not talking about executives who were "let go" (laid off). We're taking about a voluntary buyout offered to 600 executives. Some accepted the offer. Some did not. There is no reason for Disney to publish actual numbers.

We're already seeing reports of VPs being moved around. There are undoubtedly also director-level managers (those who report directly to VPs) being moved around, but there's no reason for Disney to publicly announce the changes.

In addition, Disney is laying people off. The buyout only applied to executives (high-level management). Lower level managers and others will not have the luxury of choosing whether of not to accept an offer.

If the AP article were incorrect, I'm fairly sure that Disney would have demanded a retraction. As such a retraction has yet to be published, I have to believe that AP is standing by its story

There was never an AP article that said that Disney had laid off every executive who was offered the package, regardless of whether that executive wanted to accept the offer or not.

Because there was never such an AP story, it cannot be said that "AP is standing by its story." And Disney would not have any reason to demand a retraction of something that was never published.

Please prove me wrong. Please post a link to an AP article that says that Disney laid off every executive who was offered the package.

 

[Horace Horsecollar]

I never thought the 619 included ALL management. In fact, I'm betting 619 did not include high-level management at all, but low- and mid-level management positions, especially relating to the redundant positions from the planned consolidation.

Actually, the buyouts were only offered to "high-level management."

Here's a paragraph from an Orlando Sentinel article at http://www.orlandosentinel.com/business/orl-bk-disney-buyouts-020609,0,1002742.story

"Disney said the buyout offers apply to most director-level-and-above employees at its domestic parks. Only a few executives with overriding contracts or other special circumstances are exempt."​

This is how voluntary buyouts are implemented. Essentially, those near top of the pyramid get a better deal than those further down. As I noted earlier in this thread, buyouts are offered uniformly to everything who meets the criteria.

By the way, I recommend reading the entire Orlando Sentinel article.

 

[jimmymac]

.

In addition, Disney is laying people off. The buyout only applied to executives (high-level management). Lower level managers and others will not have the luxury of choosing whether of not to accept an offer.


There was never an AP article that said that Disney had laid off every executive who was offered the package, regardless of whether that executive wanted to accept the offer or not.

Because there was never such an AP story, it cannot be said that "AP is standing by its story." And Disney would not have any reason to demand a retraction of something that was never published.

Please provide me wrong. Please post a link to an AP article that says that Disney laid off every executive who was offered the package.

BURBANK, Calif. (AP) - Walt Disney Co. says it will lay off an
unspecified number of workers as it restructures its U.S. theme
parks in the wake of declines in attendance and revenue.
Jay Rasulo, chairman of Walt Disney Parks and Resorts, said in a
statement the changes "reflect today's economic realities." The
latest job cuts follow Disney's offer last month of voluntary
buyout packages to about 600 executives in the parks division. The changes come just weeks after the Burbank-based media and
entertainment company reported a 32 percent decline in quarterly
profit amid a downturn that Chief Executive Robert Iger called
"likely to be the weakest economy in our lifetime."
The changes take effect immediately.

(Copyright 2009 by The Associated Press. All Rights Reserved.)

That's what AP and Reuters are reporting

 

[doconeill]

Actually, the buyouts were only offered to "high-level management."

Here's a paragraph from an Orlando Sentinel article at http://www.orlandosentinel.com/business/orl-bk-disney-buyouts-020609,0,1002742.story

"Disney said the buyout offers apply to most director-level-and-above employees at its domestic parks. Only a few executives with overriding contracts or other special circumstances are exempt."​

This is how voluntary buyouts are implemented. Essentially, those near top of the pyramid get a better deal than those further down. As I noted earlier in this thread, buyouts are offered uniformly to everything who meets the criteria.

By the way, I recommend reading the entire Orlando Sentinel article.

Oh, there is no doubt that the higher-ups get better deals. There was nothing to say that the 619 deals were all identical.

I don't read "director-level and above" as necessarily meaning only high-level execs. I know some organizations where Directors are mid-level. But I am not familiar with Disney's organizational structure. They do (or did) seem to have a "VP" for every little thing...but a Director could be below - or even above in some industries - a VP.

 

[doconeill]

BURBANK, Calif. (AP) - Walt Disney Co. says it will lay off an
unspecified number of workers as it restructures its U.S. theme
parks in the wake of declines in attendance and revenue.
Jay Rasulo, chairman of Walt Disney Parks and Resorts, said in a
statement the changes "reflect today's economic realities." The
latest job cuts follow Disney's offer last month of voluntary
buyout packages to about 600 executives in the parks division. The changes come just weeks after the Burbank-based media and
entertainment company reported a 32 percent decline in quarterly
profit amid a downturn that Chief Executive Robert Iger called
"likely to be the weakest economy in our lifetime."
The changes take effect immediately.

(Copyright 2009 by The Associated Press. All Rights Reserved.)

That's what AP and Reuters are reporting

I don't see anywhere where it says everyone offered the package took it or was laid off. It says that they were offered the package. It says that they "will lay off an unspecified number of workers". The two are not necessarily the same. "Workers" could be anyone - CMs most likely.

I think you were reading it wrong.

 

[jimmymac]

I don't see anywhere where it says everyone offered the package took it or was laid off. It says that they were offered the package. It says that they "will lay off an unspecified number of workers". The two are not necessarily the same. "Workers" could be anyone - CMs most likely.

I think you were reading it wrong.

See entry #12 of this thread. Disney almost never gives out numbers, good or bad; the ones in the Sentinel articles were obviously leaked by Disney employees who wanted the word to get out

 

[Horace Horsecollar]

I don't read "director-level and above" as necessarily meaning only high-level execs. I know some organizations where Directors are mid-level. But I am not familiar with Disney's organizational structure. They do (or did) seem to have a "VP" for every little thing...but a Director could be below - or even above in some industries - a VP.

I agree with your understanding of typical organization titles these days. VPs can report to directors. And a VP in a corporation means something very different thav the VP in the Federal Government. I was a bit simplistic in my description of directors reporting to VPs in an earlier post in this thread.

However, the key phrase is, "most director-level-and-above employees at its domestic parks." The package was uniformly offered to everyone at the top layers of Disney Parks & Resorts org chart, with a few specific exceptions due to "overriding contracts or other special circumstances." It was not only offered to a "selected" group of surplus or low-performing managers. And it was not offered to low-level managers.

 

[Horace Horsecollar]

That's what AP and Reuters are reporting

Exactly.

The article does not say that Disney laid off every executive who was offered the package, regardless of whether that executive wanted to accept the offer or not.

Essentially, the article says that phase 1 was a buyout offered to about 600 executives. (Think of this as trimming headcount in the top layers of the org chart through a voluntary plan.) And phase 2 is to "lay off an unspecified number of workers as it restructures its U.S. theme parks in the wake of declines in attendance and revenue." (Think of this as trimming headcount throughout the Disney Parks & Resorts sector. It could mean thousands of jobs, with nothing voluntary about it.) The article doesn't use the terms "phase 1" and "phase 2," but looking at it that way might clear up misinterpretation.

In some cases, an executive who chose not to accept the buyout will be laid off instead -- with a less generous separation package. However the vast majority of executives will undoubtedly stay, though often with new or additional responsibilities.

 

[SurfinTX]

Having just survived a RIF myself...usually this is the first step in a larger plan for a company to create some cost savings.

The first step is what we are hearing about. A voluntary incentive package for employees with large income's to leave. Usually these are pretty lucrative and some percentage of the employees that are offered this will take it.

Then come the releasing of the undesirables. Poor attendance, written up, etc.

The third step is to offer a smaller package to the lower level employees. Usualy it is targeted at people with the most senority and who have the better benefits.

If the company has to go further then you know things are bad.

 

[CanadianGuy]

I'm gonna repost this cause it seems we're still arguing over something clearly stated in this article..

This paragraph was in a good number of the stories... on both sides of the border.

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 declined to say how many executives took the buyouts.

"Satisfactory response" is ultimately an 'unknown number' - however to presume that it is 600 or even 500 is folly.

That was quoted in this article:
http://www.orlandosentinel.com/business/orl-bk-disney-reorg-021909,0,1094627.story

 

[redrosesix]

I'm gonna repost this cause it seems we're still arguing over something clearly stated in this article..

It will be interesting to see how much the total salaries change from one quarter to the next -- and how the buy-out packages are accounted for. However, total reductions in salaries will also include others who were laid off outside of the buy-out package crew.

I'm not a current shareholder -- sorry, I'm staying away from the US market until the exchange rate becomes more predictable -- but is anybody here a shareholder? If so, are you getting any interesting mail?

I know, I know. I could just take the time myself and read it off the corp. website -- I'll get around to it someday.