For 4,000 of Disney Chairman Michael Eisner's "fellow cast members," the show won't go on. At least not with them. If all goes according to plan, Disney will have reduced its payroll by that number, or about 3% of its work force, by July.
In a letter to "fellow cast members" that cited the economic downturn, Eisner and company President Bob Iger said Disney would offer a voluntary work-force-reduction plan with sweetened buyout packages for those who take it. The first round of buyouts won't be available to union members, Disney officials said. But, if the 4,000-job-cut goal is not met through the voluntary plan, the company said it would impose involuntary dismissals with less attractive severance packages.
Although there was some speculation that the theme parks may be the hardest hit, in their letter, Eisner and Iger said the job cuts would "affect business units in all of our operations, as well as corporate staff."
Disney's job-cut plan is the latest announcement by a major company (at least at press time) to reduce staffing levels in the wake of the economic downturn, and the largest within the entertainment industry.
It probably won't be the last. AOL Time Warner announced earlier that it was eliminating 2,400 jobs, largely to take advantage of efficiencies stemming from the AOL-Time Warner merger.
Commenting on the Disney announcement last week, Viacom President Mel Karmazin said his company has no current plans to terminate anyone.
At a luncheon in Hollywood last week, he was critical of Disney's move. "I never can understand how companies find themselves in a position where they have so many people they can let 4,000 people go," he said. "That's not the way you should run a business. I think the way you should run a business is by having extraordinary executives running each division, and they need to determine the right size for their organization."
Reacting to Karmazin's remarks, one Disney executive observed, "Chest-beating know-it-alls have a way of saying things that come around to bite them in the butt."
Disney provided no other details about the reduction.