Politics 28000 Layoffs coming to Disney's domestic theme parks - statement from Josh D'Amaro

[easyrowrdw]

Or typing for the one millionth time “Disney is a business” - we are all aware.

I think some posters imagine themselves as a college professor teaching other lowly posters as their students. We are allowed to question the decisions of the mighty Chapek.

Indeed. Except a good professor would be sure to emphasize that there are multiple stakeholders to which an organization is responsible and trying to balance those responsibilities is not so simple.

 

[flynnibus]

Because we're in a pandemic, Disney hired those employees and shares a responsibility for their welfare, those employees are unlikely to find comparable jobs soon, and Disney's got the means to help.

So you want Disney to be the social safety net? And expect private individuals to be the ones to support these workers?

You're saying Disney should keep people they have no intent to use.. on their payroll.. because times are hard. Well, they are hard for everyone.

WTH are you talking about? They'd need $1B to pay $37K to each of the 28,000 employees. The company is worth $229B, so they'd need 0.43% of the company's assets. To help 28,000 people. That's the equivalent of you or me giving $172 on a salary of $40,000.

"worth" is not what you have to give away. Looking at stock valuations is just layman thinking and you know better than that. When the company weakens its own financial position, it has domino effects. Credit ratings, liquidity, etc.

The company borrowed billions to ensure they had the cash to float the operations and NOT weaken their standing.

And if you are the type being morned here working for the company for 20 years and still only 'worth' $37k... then maybe this is the mercy move they needed.

See above. And FWIW, Disney's market cap fluctuates by around $5B every day. If the entire company is so precariously balanced on knife's edge that $1B less would ruin everything, how does the company get through the week?

The market cap has nothing to do with what the company has on hand... why do you keep citing stuff that has nothing to do with their actual balance sheet?

As I said in an earlier post, there are many studies that show a positive correlation between charitable behavior and stock price. You're assuming things to be true that aren't obviously true. And we all need to get away from this kind of thinking - that "this is the way it has to be." It's not.

Charitable behavior was floating their prior employee base for the last 6+ months with NOTHING to lose from the employees. Now Disney has to face the new world order.

 

[MisterPenguin]

A lot of them were part time by title, but actually worked what amounts to full time hours and more. And as I've said before, many had decades of service. So I think that counts as pretty much devoting a person's working life to Disney.

In U.S. labor law, if an employer has full time employees with benefits and part-timers without (or with less) benefits, the employer has to declare what amount of hours constitutes "full time" (whether it's 28, 30, 35, 40 as usual numbers). Then the employer has to apply that criteria to all employees equally.

So, if part-timers have been working as much as full-timers (I would guess averaged over time... one week of part-time over-time doesn't make one full-time), then they *must* receive benefits. Otherwise, it's a sneaky way to not give full-times benefits. Also a sneaky way to discriminate between employees with certain ones magically being granted benefits while those who work just as much not getting them based on race or age or gender or any other discriminatory reason.

 

[TrainsOfDisney]

So, if part-timers have been working as much as full-timers (I would guess averaged over time... one week of part-time over-time doesn't make one full-time), then they *must* receive benefits. Otherwise, it's a sneaky way to not give full-times benefits.

Lol. You’re the one living in fantasyland if you think that’s how it actually works.

I worked MORE hours than full time employees!

 

[MisterPenguin]

Lol. You’re the one living in fantasyland if you think that’s how it actually works.

I worked MORE hours than full time employees!

You employer broke the law.

And that's how it does work until you drop a dime on them.

 

[LSLS]

In U.S. labor law, if an employer has full time employees with benefits and part-timers without (or with less) benefits, the employer has to declare what amount of hours constitutes "full time" (whether it's 28, 30, 35, 40 as usual numbers). Then the employer has to apply that criteria to all employees equally.

So, if part-timers have been working as much as full-timers (I would guess averaged over time... one week of part-time over-time doesn't make one full-time), then they *must* receive benefits. Otherwise, it's a sneaky way to not give full-times benefits. Also a sneaky way to discriminate between employees with certain ones magically being granted benefits while those who work just as much not getting them based on race or age or gender or any other discriminatory reason.

Are you talking about for the ACA? The only thing I have found for parttime is the Fair Labor Standards Act, and it specifically states that they will not make any determination on what is Full vs Part time, other than for overtime (which applies to full and part time).

 

[maxairmike]

Positions have overhead. It's hard for me to stop maintaining your office space, your costume, your manager, your HR costs, the staff that support you, etc when your role is just idle vs eliminated.

There is more to the cost of a position than the direct dollars I spend on you individually or your benefits.

What do you do with thousands of employees and roles you don't have any use for?

The majority of the part time Cast eliminated were in the parks by my estimation (and that's what most of this discussion centers around, park Cast), so there's no office space to maintain for them, and the break areas are built into the park and don't impact availability of guest areas or even expansion. I doubt the stock of costumes currently in use will be immediately reduced, or even over time before costumes reach the end of their natural life. They'll just continue to hang on the racks unless they seriously downsize those facilities (again, I don't see that as likely). Management was, I'm sure, laid off in accordance with the cuts being made to the hourly staff, so that does get a bit tricky, but...can also open up advancement opportunities for those below depending upon the path you take and how you view things wrt management layoffs. Obviously there's some management you don't want to lose, but I suspect that natural attrition through long term furloughs would have taken care of them if they're unable to be called back (i.e. more likely to get a new job) quick enough. HR costs...I'm murky on what exactly those might be and doubt they would amount to that much in the grand scheme of things, but I'll allow that I'm likely wrong and it's a big enough factor. Support staff for park Cast is (to my understanding) likely to be very low per CM. For instance, I suspect the Cast Service Centers would likely be staffed by the same amount of people if they're open currently as they were before COVID, Costuming was largely automated on the front end, etc. Again, I might be wrong on the last few, but that's from my understanding.

I think there's an assumption that a lot or all of these 28k would hang on indefinitely, and I think that's far from what the reality would be. The layoffs are taking effect roughly when extended unemployment benefits will be running out, I believe (at least for FL, as things currently stand with no further federal aid, CA might be different), which means people will need jobs regardless. I'm also assuming that benefits are continually reduced as furloughs drag on (possibly with a complete ending at some point), further incentivizing people to seek other permanent employment. To me, this is a potentially "better" way to handle the situation both for both PR purposes and to those affected that doesn't (at least to me) appear to change the end result for the company in a meaningful way vs announcing that number of forced layoffs. Obviously there's no way to avoid some layoffs in the current situation, but it seems like this massive targeting of part time doesn't have that big of an immediate or near term payoff when they weren't working (and there will still be a large number of full time continuing on furlough beyond the new year with Disney paying for their health insurance premiums if things continue as they currently are) and being paid, anyway, and the HR support was already downsized/furloughed accordingly.

ETA: This is all obviously assuming there's any intention or likelihood of the majority being brought back. Given Iger's statements over the previous year or so and at the start of this situation, I don't think that's likely and that a large number of these layoffs would have occurred over the next 5-10 years anyway.

 

[MisterPenguin]

Are you talking about for the ACA? The only thing I have found for parttime is the Fair Labor Standards Act, and it specifically states that they will not make any determination on what is Full vs Part time, other than for overtime (which applies to full and part time).

It was drilled into me by my corporate overlords that for any franshise I manage, I need to make a bright line between full v. part time and apply it equally to all employees lest it be seen as discrimination.

Just imagine if an employer has 10 White full-time workers who work over 30 hours a week with benefits. And 10 more Black workers all starting at part-time, but then all eventually also working more than 30 hours a week but without the benefits the White workers get because "they're only part-time."

 

[LSLS]

It was drilled into me by my corporate overlords that for any franshise I manage, I need to make a bright line between full v. part time and apply it equally to all employees lest it be seen as discrimination.

Just imagine if an employer has 10 White full-time workers who work over 30 hours a week with benefits. And 10 more Black workers all starting at part-time, but then all eventually also working more than 30 hours a week but without the benefits the White workers get because "they're only part-time."

Your example is completely different, you are making the case for discrimination, not calling someone full vs. part time. Everything I have found states that there are no rules about what constitutes a part time or full time employee. I mean, college program is considered part time and get no benefits, and there is no chance you will convince me they work less hours.

 

[flynnibus]

The majority of the part time Cast eliminated were in the parks by my estimation (and that's what most of this discussion centers around, park Cast), so there's no office space to maintain for them, and the break areas are built into the park and don't impact availability of guest areas or even expansion. I doubt the stock of costumes currently in use will be immediately reduced, or even over time before costumes reach the end of their natural life. They'll just continue to hang on the racks unless they seriously downsize those facilities (again, I don't see that as likely). Management was, I'm sure, laid off in accordance with the cuts being made to the hourly staff, so that does get a bit tricky, but...can also open up advancement opportunities for those below depending upon the path you take and how you view things wrt management layoffs. Obviously there's some management you don't want to lose, but I suspect that natural attrition through long term furloughs would have taken care of them if they're unable to be called back (i.e. more likely to get a new job) quick enough. HR costs...I'm murky on what exactly those might be and doubt they would amount to that much in the grand scheme of things, but I'll allow that I'm likely wrong and it's a big enough factor. Support staff for park Cast is (to my understanding) likely to be very low per CM. For instance, I suspect the Cast Service Centers would likely be staffed by the same amount of people if they're open currently as they were before COVID, Costuming was largely automated on the front end, etc. Again, I might be wrong on the last few, but that's from my understanding.

I think there's an assumption that a lot or all of these 28k would hang on indefinitely, and I think that's far from what the reality would be. The layoffs are taking effect roughly when extended unemployment benefits will be running out, I believe (at least for FL, as things currently stand with no further federal aid, CA might be different), which means people will need jobs regardless. I'm also assuming that benefits are continually reduced as furloughs drag on (possibly with a complete ending at some point), further incentivizing people to seek other permanent employment. To me, this is a potentially "better" way to handle the situation both for both PR purposes and to those affected that doesn't (at least to me) appear to change the end result for the company in a meaningful way vs announcing that number of forced layoffs. Obviously there's no way to avoid some layoffs in the current situation, but it seems like this massive targeting of part time doesn't have that big of an immediate or near term payoff when they weren't working (and there will still be a large number of full time continuing on furlough beyond the new year with Disney paying for their health insurance premiums if things continue as they currently are) and being paid, anyway, and the HR support was already downsized/furloughed accordingly.

Let's keep it really simple... Having 30k employees is a lot more expensive then having 15k employees.

People keep saying "oh its not indefinitely..." ok, then what is the acceptable time to say 'now is the time'? It's already been 6 months..

 

[asianway]

Maybe c harris snuck back into the building...

Sure feels like we are going to be facing those mid 2000s again...

For a minute I thought you were talking about the VP candidate

 

[lentesta]

So you want Disney to be the social safety net? And expect private individuals to be the ones to support these workers?

You're saying Disney should keep people they have no intent to use.. on their payroll.. because times are hard.

Yes, I'm saying Disney, and all corporations, need to play a larger part in the US social safety net. And yes, that means shareholders, as private individuals, need to pitch in more.

And yes, I'm saying that Disney should keep these people on their payroll for some period of time even if they're not being used. Let's say a year is Disney's responsibility, just so we can talk about concrete numbers. Beyond that, it's up to the employee and local, state, and federal taxpayers. (I'm not wedded to a year, but again, let's make the numbers easy to talk about.)

Well, they are hard for everyone.

Billionaires got $637 billion richer during the pandemic.

"worth" is not what you have to give away. Looking at stock valuations is just layman thinking and you know better than that. When the company weakens its own financial position, it has domino effects. Credit ratings, liquidity, etc.

The company borrowed billions to ensure they had the cash to float the operations and NOT weaken their standing.

Fair enough. I think they tapped $18.2B in debit in 3 rounds earlier this year [cite] in debt that comes due in 6 to 40 years, at interest rates of 3.35% to 4.7% [cite].

Let's assume that Disney doesn't use its dividend or cash on hand, and they don't issue new stock or sell assets, and let's assume they set aside $1B for those 28,000 employees.

Adding $1B in debt at 4% interest for 30 years would've cost Disney $4.8MM per month, or $57.6MM per year.

Bob Iger got $65MM in compensation in 2018. [cite]

So yeah, to help 28,000 people for a year they would've had to expend slightly less money per year than they paid that one guy.

That does not, in the overall scheme of things, sound like it's a huge risk.

And again, there's no guarantee that "markets" would've viewed this negatively. It would've been a massive positive PR story.

 

[maxairmike]

Let's keep it really simple... Having 30k employees is a lot more expensive then having 15k employees.

People keep saying "oh its not indefinitely..." ok, then what is the acceptable time to say 'now is the time'? It's already been 6 months..

Like I said, I think this is a situation where natural attrition would have taken its course for the great majority of those impacted not too long into the new year. Then you can say "Yes, unfortunately we're laying off/eliminating X# of positions, however X% have already found additional employment and we have confirmed that these roles will not be needed in the near future."

 

[TrainsOfDisney]

2 weeks ago I was on a zoom conference call with a ceo of a multi-million dollar company that I work with.

He was bragging that they made it through October with no layoffs, and no reductions in salary and that thanks to everyone on the team pivoting ASAP, they were ahead of all financial projections for 2020.

Oh yeah... and 70% of their revenue up until March of this year came from live events.

 

[gerarar]

About 170 - 180 total to pull off Fantasmic! each night and 80 of those are onstage/backstage. There are multiple people that know each of those 170 - 180 positions. After layoffs, there aren't currently enough people in those roles to pull off Fantasmic!

That’s very sad to hear. I hope one day they can all get employed back so they can bring smiles and laughter to thousands of people each night again.

 

[Lilofan]

In U.S. labor law, if an employer has full time employees with benefits and part-timers without (or with less) benefits, the employer has to declare what amount of hours constitutes "full time" (whether it's 28, 30, 35, 40 as usual numbers). Then the employer has to apply that criteria to all employees equally.

So, if part-timers have been working as much as full-timers (I would guess averaged over time... one week of part-time over-time doesn't make one full-time), then they *must* receive benefits. Otherwise, it's a sneaky way to not give full-times benefits. Also a sneaky way to discriminate between employees with certain ones magically being granted benefits while those who work just as much not getting them based on race or age or gender or any other discriminatory reason.

It all depends what the company payroll dept defines as part timers working too many hours to make them full time with benefits. I've known in my younger days part time workers work 100 hrs per week for several weeks during high season but in low season they work few hours or not at all.

 

[Goofyernmost]

Nope that isnt true. We are purchasing the "product" and if we dont like the product any longer, we can find another option. This doesnt benefit the company, the stockholders or the BoD at all. They may not like what people are saying and especially if it is being discussed at a national level such as Elizabeth Warren or the Moderator at the debates did, but if they are smart they should be listening. Marie

My point is as individuals we have no power at all. As a group yes, but that just isn't going to happen, at least for a long time. Active shareholder usually have a lot more invested then we peasants.

 

[wdwfamilynh]

Sorry if this has already been asked and answered, but has Ms. Warren sent similar (or the same) letters to other companies who have laid off employees this year? Or is Disney the only company in her crosshairs?

 

[wdwmagic]

Sorry if this has already been asked and answered, but has Ms. Warren sent similar (or the same) letters to other companies who have laid off employees this year? Or is Disney the only company in her crosshairs?

Here is a summary of her activity

Press Releases | U.S. Senator Elizabeth Warren of Massachusetts

The Official U.S. Senate website of Senator Elizabeth Warren of Massachusetts

www.warren.senate.gov

 

[wdwfamilynh]

Here is a summary of her activity

Press Releases | U.S. Senator Elizabeth Warren of Massachusetts

The Official U.S. Senate website of Senator Elizabeth Warren of Massachusetts

www.warren.senate.gov

And so it goes...