Disney to cut 4,000 jobs, 3 percent of work force
Wednesday, March 28th 2001, 12:00 am
By: News On 6
NEW YORK (AP) _ Citing a downturn in the economy, the Walt Disney Co. announced it would cut 4,000 full-time jobs, or about 3 percent of its work force.
In a letter addressed to ``fellow cast members,'' Disney Chairman Michael Eisner and President Robert Iger said the company has been working to contain costs and operate more efficiently.
``Despite our progress, the economy has become more challenging in recent months and we must continue to seek ways to manage our businesses even more productively,'' the letter said.
Cuts will come by July in all operating areas, including corporate staff in Burbank, Calif., the company said Tuesday.
The media and entertainment giant said it would offer severance incentives, including extended benefits, but it will lay off workers if it cannot make the cuts voluntarily by the end of April.
The company employs 120,000 workers worldwide, including 55,000 in Orlando, Fla.
The cuts will save the company $350 million to $400 million a year, after a one-time charge of less than $250 million, Disney spokesman John Dreyer said.
The company's ABC Television network has struggled recently with a softening advertising market due to a general weakness in the economy. Analysts have also been concerned that declining consumer confidence would hurt attendance at the company's theme parks.
In a separate move, Walt Disney World, central Florida's largest employer, ordered a hiring freeze. Only critical positions will be filled there.
Christopher Dixon, an analyst at UBS Warburg, said Tuesday that the layoffs were expected.
``There have been major concerns in the advertising market, and Disney has been expanding,'' Dixon said. ``Disney has had an ongoing focus on cost cutting and is clearly using the current weakness in the marketing environment to trim some excess fat.''
Since January, the company has laid off 535 workers from its Walt Disney Internet Group.
Disney announced the latest job cuts after the close of regular trading on the New York Stock Exchange, where it finished up $1.28 to close at $29.20.