An Unhappy Toon

Walt Disney Co. (Burbank, Calif.) has announced that it will be laying off about 1000 workers, mostly from its U.S. theme parks in Anaheim, Calif., and Orlando. However, layoffs will also include about 24 employees in the Disney-owned ABC network's news operation and another 25 people in the movie, music, home entertainment and TV animation divisions. There was no indication to what extent employees in the Retail Stores or Imagineering departments would be affected.

Earlier this year, the entertainment conglomerate announced it would be cutting 4000 jobs worldwide, or 3 percent of its 120,000-person workforce. At the time, Disney chairman and ceo Michael Eisner cited weaknesses in the economy. “We need to face up to the increasingly pressing challenges of the softening economic environment,” he said. “We must also uphold investors'confidence in our future while maintaining our core commitment to quality and creativity.”

It has been 27 years since the company made such a large, across-the-board reduction. In 1974, the nation was in the throes of an oil shortage, inhibiting Americans'ability to take long driving vacations. So Disney cut 1700 jobs, or 20 percent of its staff, at Orlando's Walt Disney World. At the time, Disney World represented 70 percent of all of the company's operations. Today, Disney owns the ABC broadcast network, ESPN cable network, theme parks, an animation and live-action studio and has a consumer products division, and is facing increasing pressure from a drop in ad revenue for ABC and other media outlets. A Disney spokesman said the company is trying to meet its overall fiscal 2002 goal of 13 percent to 15 percent cash-flow growth. Disney is looking for cash flow of $2 billion next fiscal year, and these cuts are expected to save up to $400 million a year.