The Walt Disney Company is making headlines again, and not just because Magic Kingdom is finally opening the TRON coaster next month.
In early February, during the earnings call for the fiscal first quarter (October 1 through December 31, 2022), Bob Iger unveiled a shocking, multi-faceted plan to right the financial ship at Disney and cut costs of more than $5 billion across the company. Such an undertaking confused some and seemed like overkill to others, especially following revelations about the company’s financial performance over the quarter–most of which exceeded even Wall Street’s projections. Disney’s revenue grew to $23.5 billion over the three-month period–an increase of 8% over the previous year. And the Company’s earnings per share increased to $0.99.
But for Iger, the increases, the growth, the shattered projections, and words ending in “-illions” that begin with the letter “b” weren’t enough, and per the veteran CEO, immediate steps would be taken to bolster Disney’s financial picture.
“After a solid first quarter, we are embarking on a significant transformation,” Iger said in Disney’s earnings release, “one that will maximize the potential of our world-class creative teams and our unparalleled brands and franchises. We believe the work we are doing to reshape our company around creativity while reducing expenses, will lead to sustained growth and profitability for our streaming business, better position us to weather future disruption and global economic challenges, and deliver value for our shareholders.”
Part of Iger’s “significant transformation” includes the laying off of 7,000 Disney employees–a number that represents approximately 4% of its global workforce. Disney’s chairman of Parks, Experiences, and Products, Josh D’Amaro, warned fans that the cuts would be felt across all the parks as well, including Disney World and Disneyland.
The layoffs could take place in waves, according to reports over the weekend that the livelihood of 4,000 Disney employees hangs in the balance. Disney executives have reportedly given orders to managers to choose which of their respective employees is among those most deserving of being laid off, asking them to identify workers who are “redundant and disposable.” Execs have given managers a deadline, and the lists of names are due within two weeks, meaning the huge wave of layoffs could begin as early as the first week of April 2023.
And that’s the extent of the story as it’s being reported. But what’s not being reported is whether those Disney managers are being guided in how to make such a determination about their employees. Such a task seems a difficult one, if not impossible. Simply put, this writer wouldn’t want to be a manager within the House of Mouse during this season of “change.”
While Disney’s decision to lay off thousands of workers is being presented as a means of cutting costs, many–lovers and haters of the Mouse alike–realize that the cost-cutting isn’t in response to some massive financial fallout at Disney. Not by a long shot. Iger’s decision projects the false image of The Walt Disney Company being in dire straits, losing money as if to evil villains who laugh manically while siphoning earnings and hiding the acquired loot away in their respective evil castles, set against a backdrop of dark, swirling clouds for dramatic effect, of course.
But it’s certainly no secret that The Walt Disney Company is top-heavy, and its expansive suite of C-level execs aren’t leaving the office in the evening, driving ten-year-old sedans to modest, three-bedroom homes, and attempting to summon the strength to boil a pot of water on the stove so they can enjoy a box of mac and cheese for dinner. Not hardly.
One report says it well–that Disney is pursuing the aforementioned wave of layoffs after “caving to pressure from its profit-seeking shareholders.” Like Disney’s execs, shareholders expect and demand a high return on their investments. And it’s double jeopardy for Cast Members and fans alike when Disney’s C-level execs are among the top three individual insider shareholders.
A report at Investopedia lists the top individual Disney shareholders as CEO Robert A. Iger, CFO Christine M. McCarthy, and Disney’s former Senior Executive Vice President and General Counsel Alan N. Braverman. And though it’s not uncommon for a company’s highest-ups to hold the most shares among its individual shareholders, it seems a stark conflict of interest when the individuals in question control the company’s course toward increased profitability and simultaneously enjoy great returns when said course proves to be the path most profitable.
This leads to individual decisions made based on individual gains, ultimately resulting in fallout among those on the bottom of the org charts. And when uber-lucrative companies cut employees in the name of increased profitability, it’s a cold and cruel piece of harsh reality that smacks you in the face–that harsh reality being that the employees who represent the face of the company–the ones often most responsible for the actual “heavy lifting”–are always the first casualties during a reorganization. That’s the nature of business. But it doesn’t mean it isn’t heartbreaking for those most affected by it.
In short, Bob Iger needs his 1,150,138 shares of Disney stock to continually grow in value, so if it means that Cast Members at the parks no longer have jobs, so be it. Again, it’s the nature of business. But it’s wildly unfortunate, and it seems doubly unfortunate within a company like Disney, the very existence of which serves to add magic, entertainment, and enjoyment to the lives of people all the world over. It’s sad when the magic doesn’t extend to those most commonly tasked with creating it themselves.
And it bares repeating that execs have given Disney’s managers a mandate: to determine the most disposable employees in their charge, to decide which employees are redundant. Redundant–synonymous with useless, unnecessary, inessential, and unwanted. No matter which employees receive a pink slip, they’ll do so knowing that they were considered useless, unnecessary, inessential, and unwanted. Disgraceful.
While such a practice might be commonplace in the business world, it’s in direct opposition to The Walt Disney Company’s self-prescribed core values. (And Disney is a different kind of business.) On the company’s Life at Disney webpage, the company details its core values for employees and begins by stating that Disney strives “to design work environments that inspire optimism and drive innovation for all employees, at all levels. And because we recognize that maintaining an inclusive, supportive workplace requires mindful attention and intention, we continually adapt to the evolving needs of our people.”
Further, the Company defines its values as optimism, innovation, decency, quality, community, and storytelling.
But the recent move to lay off thousands of employees in an effort to bolster profitability maligns those values and negates them completely. For the scores of Cast Members who will soon be unemployed, what cause is there for optimism? Innovation involves outside-the-box thinking, not generic business-as-usual practices like layoffs. And is there decency in cherry-picking employees who will soon be unable to feed their families or put fuel in their vehicles? Such a decision on the part of the company is not one that fosters a sense of community, and in the weeks and months to come, storytelling will be plentiful, but feature dismissed Disney employees as the authors of heartwrenching stories rife with struggle and anxiety.
Over the past few years, Abigail Disney–granddaughter of Disney co-founder Roy O. Disney, and grand-niece of Walt Disney–has been outspoken about issues she sees with The Walt Disney Company. Recently, she spoke out about the origination of profits within a company, saying that “it comes back to understanding that you can’t create profits without workers.” She went on to say that “the profits and the fruits of the business rightfully belong to the people who produce it, and not exclusively to the people who own the means of production.”
Her statements are interesting, especially in light of the fact that none of the Disney execs revving up for a massive round (or two or three) of layoffs are missing a financial beat. According to company filings, Bob Iger made approximately $130 million between 2019 and 2022, and during 2022, Disney’s CEO-to-worker pay ratio was 446 to 1.
In the true spirit of optimism, innovation, decency, and community, doesn’t it make more sense for Disney’s execs to do some of the heavy lifting by way of agreeing to a moratorium on bonus payouts until the company can regain the desired level of profitability? No layoffs, fewer (if any) casualties, happy shareholders, and no severe blow to the company’s list of core values.
If it’s a win-win scenario Disney’s execs are looking for, they certainly won’t find a better one than this. But the ball is in their court. May optimism, innovation, decency, and community prevail. But if Disney is determined to have casualties along the way to unsurpassed profitability, which “redundant” and disposable employees should go first? How about the redundant Cast Member at the gates of Magic Kingdom who stands at the ready anytime a Guest can’t scan in for admittance to the park? Or perhaps the useless engineers responsible for the blueprints for Disney World’s newest attraction? Maybe it should be the unnecessary registered nurses at the first aid stations at all of Disney’s theme parks.
And while we’re at it, why not pick the inessential team of employees who oversee the Disney College Program? Or the superfluous employees who process applications for Cast Members as part of Disney’s Aspire program, who make arrangements for kids to visit Disney World as part of the Make-A-Wish program, and those tasked with ensuring that Disney’s Disability Access Services program is accessible to every Guest who needs those services?
If Disney execs can truly say that these employees (and others) are useless, then by all means, here’s hoping they’re the first to go. Otherwise, it’s time for a new plan.