Layoffs at Walt Disney World and other divisions of WDC

[danlb_2000]

You simply cannot apply a standard cost-cutting business model at WDW. THe law of unintended consequences will rear its head.

Actually this goes for a lot of business, but they do it anyway.

 

[PhotoDave219]

Actually this goes for a lot of business, but they do it anyway.

Like I said, Its not just here. They juke the stats everywhere. Its not just MBAs, its the new American Corporate Culture: Smoke and Mirrors, the Illusion of Success.

And after raising prices on everything lately, they cant scream poverty. After constantly raising the price of ESPN per subscriber, they cant scream poverty. Maybe they should look at long term reinvestment rather than quarterly profits.

 

[donsullivan]

But what if your product isn't tangable? What if its an idea or a feeling? What if your product is Guest Service and Happiness? Then what?

I'm not sure I see the two concepts as mutually exclusive. Although the article that started this dialog referred to all of the different operating companies that make up Disney Enterprises, I'll stay focused on WDW here.

I find it hard to believe that an organization the size of WDW and it's 60,000+ cast members does not include areas of opportunity to reduce the staff without compromising the guest experience. Suggesting that the organization look for cost reduction opportunities shouldn't automatically mean front-line cast member reductions. I don't think I'd be surprised to find that their are countless groups throughout the back-office spaces that would not negatively impact the guest experience if that group or layer of the organization was removed or reduced.

Every large organization accumulates layers of management attempting to solve a problem at some time in history but sometimes you need to validate whether it's still necessary or could be removed. Reducing a layer of management can often result in improved guest experience by reducing the layers and potentially improving communication. You can't just blindly do it but done effectively it can actually improve an organization by forcing it to prioritize and focus on what's important and stop doing things that don't add value to the final goal which in WDW case is the guest experience.

 

[PhotoDave219]

Every large organization accumulates layers of management attempting to solve a problem at some time in history but sometimes you need to validate whether it's still necessary or could be removed. Reducing a layer of management can often result in improved guest experience by reducing the layers and potentially improving communication. You can't just blindly do it but done effectively it can actually improve an organization by forcing it to prioritize and focus on what's important and stop doing things that don't add value to the final goal which in WDW case is the guest experience.

But they never reduce management. They always reduce the worker bees... and then wonder why their product has gone in the crapper?

 

[Magenta Panther]

And yet Iger can find plenty of money to buy Marvel, Lucasfilm, the rights to Avatar, etc. This cost-cutting is no doubt related to the stupid purchases that fathead has made. He has reduced the current profitability of WDC because of his bone-headed shopping sprees. And who gets screwed because of it? The heartbeat of the parks - the Cast Members. THIS SUCKS!!!!!!

 

[Magenta Panther]

This happens at all big companies because the Ivy League MBAs who are hired come in with the goal of cutting a bunch of costs so they can trumpet how much they increased profits. And then the MBAs leave that company for another one...their big picture goal is to work at 4 or 5 big companies before they are 45, and then they start their own consulting companies. None of these guys plan on being at any company for longer than 3 years because that would make it harder for them to be in high positions at a half dozen corporations before they leave to hang up their own shingle.

There's no concern for the longterm health of a company from these guys. They just want to cut, cut, cut so that when they leave in 3 years they can show savings and increased profits...and they are never held accountable for any problems that develop as a result of all those cuts.

To me it feels like playing that game Jenga. They keep taking out pieces from the bottom because they think that no one pays attention to those and they are expendable. But if you keep removing pieces from the bottom the tower starts to wobble. The MBAs don't care, because they keep drawing attention to the top which looks fine. Meanwhile, the tower's being undermined and destabilized and gets shakier and shakier until one day something will shake it. A while back before those pieces were removed it could have survived that shake, but after all the cuts it's become so weak it will fall.

The MBAs are long gone though...playing the same game at another table now.

There are those here who are going to slam you for such views. But they are nonetheless true, in many cases. I have myself seen it happen twice. Corporate lawyers cutting salaries, workers, benefits, all in an attempt to make a company's bottom line a little fatter. And in some cases, making a company look more attractive for buyers...

 

[Polydweller]

A fair amount of Next gen is direct expense and not depreciated even though it is a part of the However many Billion dollar total were up to now. Its been commented as a drag on P&R earnings in a few of the conference calls.

Yes it's a drag on profits, but like all capital expenditures it ends at some point and its maintenance becomes an operating cost. But ongoing operating costs continue perpetually and it's those which the investors and bankers worry about the most and unfortunately in any business it's people costs that are the largest component of operating costs and can be as much as 80% or more. To make any real long term savings companies have little choice but to go after that 80%. Sad but given the companies I have been employed by and in one case part owner of far too true.

 

[ScoutN]

ESPN is seperate entity from the parks with seperate budgets. The parks budget does not have affect on ESPN and vice versa. Also, ESPN is not fully owned by the Disney company - 80% owned by Disney, 20% owned by Hearst Corporation.

Do you have any idea how a corporation works?

 

[HMF]

It really is a sad world we live in now. It's not about making quality products anymore it's all about $$$$$$$!

 

[GoofGoof]

Sweetie, I've been in business for 30 years. I've known a lot of MBAs. So I am entitled to an opinion on them.

I've never met you. I've never mentioned you or talked about you. If you think I'm talking about you, then you have a very active imagination and one huge ego (as well as delusions of persecution). Not everything in life is about you.

But, I've seen MBAs in action. I've watched them ruin companies like Disney because it's very true that these guys aren't interested in making decades-long careers in companies...but instead are being taught in school that they need to look out for themselves, and jump around from company to company while staying no more than 3 years at each one. I have had dozens of MBAs tell me this is what they leave business school learning.

The guy that mows my lawn is a business owner. Doesn't mean he knows the first thing about running a fortune 500 public company. I find it hard to believe that anyone with an MBA from a reputable business school was taught what you are suggesting, but don't let facts or the truth get in the way of your story

 

[Jimmy Thick]

The theme parks are profitable, why would they trim jobs at the resorts, that makes no sense.

I would think they would dump people in the Disney Film area than the theme parks.

Jimmy Thick- First NextGen big brother, now this...

 

[Brewmaster]

The theme parks are profitable, why would they trim jobs at the resorts, that makes no sense.

I would think they would dump people in the Disney Film area than the theme parks.

Jimmy Thick- First NextGen big brother, now this...

Very good observation James, unfortunately it appears that P&R AND DCL will be part of the corporate trimming. One thing is certain, it will be a MAGICaL RIF

 

[Darth Sidious]

It really is a sad world we live in now. It's not about making quality products anymore it's all about $$$$$$$!

What's more upsetting is that people forget the two are correlated. Make quality products, things that people want... The money will follow.

 

[ToTBellHop]

The theme parks are profitable, why would they trim jobs at the resorts, that makes no sense.

I would think they would dump people in the Disney Film area than the theme parks.

Jimmy Thick- First NextGen big brother, now this...

Well WDW was less profitable in 2012. So you can either invest money to drive up income or you can cut expenditures to raise profits. Unfortunately for us, Disney seems to have chosen the latter.

What's more upsetting is that people forget the two are correlated. Make quality products, things that people want... The money will follow.

Disney seems to have recurring amnesia on this. Others in the Orlando area seem to realize they are inter-related, however. Which I guess we benefit from if we are willing to drive off property--and more and more of us are. Keep focusing on those first timers from South America, Disney. And update Fantasic! to ¡El Fantasmico! Espectaculo.

 

[PhotoDave219]

Well WDW was less profitable in 2012. So you can either invest money to drive up income or you can cut expenditures to raise profits. Unfortunately for us, Disney seems to have chosen the latter.

Disney crying poverty is one of the most ludacrist things I've ever heard of.

 

[ibaw]

Do you have any idea how a corporation works?

I would not be so quick to judge this comment. Have you ever participated in the forecasting/budgeting process at the Walt Disney Company?

 

[ibaw]

But they never reduce management. They always reduce the worker bees... and then wonder why their product has gone in the crapper?

I suppose this comment must be interpreted with a mutual understanding of the term "worker bees." For me this is hourly front-line CMs. Therefore, I am not sure that this would be the case if you were to review the layoffs in 2009.

 

[ibaw]

Sweetie, I've been in business for 30 years. I've known a lot of MBAs. So I am entitled to an opinion on them.

I've never met you. I've never mentioned you or talked about you. If you think I'm talking about you, then you have a very active imagination and one huge ego (as well as delusions of persecution). Not everything in life is about you.

But, I've seen MBAs in action. I've watched them ruin companies like Disney because it's very true that these guys aren't interested in making decades-long careers in companies...but instead are being taught in school that they need to look out for themselves, and jump around from company to company while staying no more than 3 years at each one. I have had dozens of MBAs tell me this is what they leave business school learning.

This however does not counteract the over-generalizations you are making in your original post. I am sorry to say but there are some people who crunch numbers, work on cost cutting, budgets, plans, etc for TWDC (including having worked within the confines of the big, bad TDO) who frequent this site. We (or should I say 'they') all definitely do not match the over-generalizations that you make. I am sorry that you have had a negative experience, but there is still some good in the world (including within corporate america!).

 

[ScoutN]

I would not be so quick to judge this comment. Have you ever participated in the forecasting/budgeting process at the Walt Disney Company?

Sure haven't. Did get a chance to sit down and have a meal with the OP tonight and discuss the matter. Much more insight than any grumblings in this thread thus far that amount to bashing and defending a degree.

 

[ToTBellHop]

Disney crying poverty is one of the most ludacrist things I've ever heard of.

Agreed, but, of course, I don't have to explain numbers and what's being done to fix them to anyone. I just worry about pretty new waterfalls, bathrooms, and RFID.