Walt Disney Co. has offered voluntary buyout packages to about 600 executives at its domestic theme park and resort divisions as it seeks to trim costs in the face of a worsening economy.
Directors, vice presidents and other senior executives who work in Disney’s two theme park locations in Anaheim and Orlando, Fla.; on its two cruise ships; at Disney’s corporate headquarters in Burbank; and at Walt Disney Imagineering have until Feb. 6 to decide whether to take the voluntary separations. The company said that if it did not get enough volunteers it would implement involuntary layoffs with “a lesser severance package.”
A Disney executive declined to disclose whether the company had a specific number of reductions in mind. But the buyouts extend to less than 1% of Disney’s domestic park employees.
The executive said that it was undecided whether voluntary buyouts would also be offered to the unionized hourly salaried employees who work at the parks and resorts.
“The parks and resorts division is in the process of implementing a number of initiatives to contain costs and maximize efficiency,” Disney parks and resort spokeswoman Leslie Goodman said. “Given the continued uncertainty of the economic environment, we must manage our business even more productively.”
Disney parks initially had been insulated from the effects of the slowing economy, as families were reluctant to cancel vacations that had been booked months in advance. But by the fall, Disney began to roll out promotions to stimulate park attendance and spending. In September, the parks unveiled a “celebration vacation” promotion for 2009 that granted free admission to people who visited Disneyland or Walt Disney World in Florida.
Historically, Disney’s parks have been a major contributor to the company’s growth, accounting for more than 20% of its operating income. Nonetheless, the parks tend to be vulnerable during economic downturns when tourism falls off.
Last year, Disney’s parks and resorts generated $11.5 billion in revenue and nearly $1.9 billion in operating income.
Although operating income for the year was up 11%, it fell 4% in the fiscal fourth quarter ended Sept. 27.