Disney Plans to Lay Off Up to 400 From Division That Designs Theme Parks

Walt Disney Co. intends to dismiss 300 to 400 permanent employees next month from its Glendale-based Imagineering division in the wake of Euro Disney’s completion and the slowed economy, company executives confirmed Wednesday.

The Imagineering unit, which is responsible for Disney’s theme park design, employs about 2,100 people. Anthony Hatch, director of Imagineering communications, said the staff reduction will take place in mid-August. The layoffs are the company’s biggest since the Michael D. Eisner-led management team took over in 1984.

Layoffs have routinely occurred after the completion of each theme park, but the move is particularly painful to the affected employees, since Southern California’s moribound economy shows no sign of rebounding. Disney will provide outplacement services to assist employees searching for new jobs, Hatch said.

Just two years ago, Eisner declared that this would be the “Disney Decade,” with a host of ambitious expansion plans in the theme park business. On Wednesday, Eisner could not be reached for comment. But Thomas Deegan, corporate communications vice president said, “I think some of these projects have been delayed as the economy has somewhat withered.”

Disney has almost completed the doubling of its tour capacity at the Disney-MGM studio attraction in Florida; it has also expanded its hotel capacity in Orlando. And its biggest project--the 49%-owned Euro Disney outside Paris--opened earlier this year.

But Disney’s partners in Japan have turned down a plan to build a studio attraction at Tokyo Disneyland. And other projects outlined at the shareholder meeting in 1990 have not materialized, such as the production of a new Andrew Lloyd Webber musical at the Orlando park. Deegan said he doesn’t know the status of two other projects outlined for Disneyland in Anaheim: the revamping of Tomorrowland and creation of a new Hollywoodland attraction.

The Imagineering unit--formerly known as WED Enterprises--employed about 2,100 during the early 1980s when Disney was building Epcot Center in Florida and Tokyo Disneyland. By 1984, however, the work force had been reduced to less than 500.