Disney to cut 4,000 jobs

Posted at 4:35 p.m. PST Tuesday, March 27, 2001

BY GARY GENTILE, AP Business Writer

http://www0.mercurycenter.com/cgi-bin/edtools/printpage/printpage_ba.cgi

NEW YORK (AP) -- The Walt Disney Co. said Tuesday it is eliminating 4,000 full-time jobs, or about 3 percent of its global work force. The media and entertainment giant cited the ``increasingly pressing challenges of the softening economic environment.''

It said that it will try to achieve the cuts through a voluntary program within the next month, but that layoffs may be needed. The cuts will come across all operating areas, including the company's corporate staff in Burbank, Calif., Disney said.

Disney employs 120,000 people worldwide, with the greatest concentration -- 55,000 -- in Orlando, Fla., home of Disneyworld. A company spokesman announced a hiring freeze at the park.

Disney spokesman John Dreyer said the job cuts would result in $350 million to $400 million in annual savings.

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.

``But 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.

Walt Disney World spokesman Bill Warren told the Orlando Sentinel the park will freeze almost all hiring because of an expected decline this year in visitors. Disneyland spokesman Ray Gomez said the Anaheim, Calif., park had no plans for a hiring freeze.

Disney's ABC Television network has struggled recently with a softening advertising market due to general weakness in the economy. Analysts have been concerned that declining consumer confidence would hurt theme park attendance.

``The news has been anticipated,'' said Christopher Dixon, an analyst at UBS Warburg. ``There has been major concerns in the advertising market and Disney has been expanding. 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.''

Disney announced the job cuts after the close of regular trading on the New York Stock Exchange, where it finished up $1.28 to $29.

-- Swissrose (cellier3@mindspring.com), March 27, 2001