Disney: Another Famous Multinational Begins to Lay Off Its Employees

Disney is not alone in this type of situation. Technology companies such as Amazon, Google, HP, IBM, Meta, Microsoft, Spotify, Salesforce and Philips have announced cuts between 2022 and 2023. And if we stick exclusively to the entertainment industry, others such as Paramount, Comcast and Warner Bros. Discovery have followed suit.

Long faces are what you see in the magical world of Disney. The U.S. economic and entertainment emporium, which attracts millions of fans around the world, will begin a major wave of layoffs this week, which, according to the announcement, will be the first of three rounds before the start of summer. In total, it is estimated that 7,000 jobs will be sacrificed, according to the memo sent to all staff by CEO Bob Iger, as published by CNBC.

How will mass lay-offs work?

The reason for the massive layoffs that will take place at three times, but in a very few months, is due to the entertainment company’s policy of reducing corporate expenses. This, with the aim of increasing free cash flow and Disney’s forecast. The company wants to cut costs by $5.5 trillion, which in turn is due to the severe impact caused by prolonged upward inflation, the Federal Reserve‘s high interest rates. Rates that have made everything more expensive, as well as by the most recent global financial crisis due to the failure of banks in the United States.

Thus begins a week of dread for Disney workers who, as in a kind of roulette where being chosen is not the greatest desire. This week they will begin notifying employees whose jobs will be affected by the company’s staff reductions. From what the company’s executive leader said.

“Leaders will communicate the news directly to the first group of affected employees over the next four days. A second, larger round of notifications will occur in April with several thousand more staff reductions, and we expect to begin the final round of notifications before the start of summer to reach our goal of 7,000 jobs.”

NOTE: It should be recalled that layoffs had been announced since February, which gave employees room to make decisions.

Employees, the first to be affected

The problem is that, in this type of situation, the first to be affected are the employees. Not surprisingly, the Disney executive explained that:

“We have made the difficult decision to reduce our overall workforce as part of a strategic realignment of the company, which includes significant cost-saving measures necessary to create a more efficient, coordinated and optimized approach to our business.”

What lies ahead is still uncertain, but, in the meantime, fear is growing among the workforce, which is expectant of the evolving landscape, amid which Disney’s chairman told them:

“For our unaffected employees, I want to acknowledge that there will certainly be challenges ahead as we continue to build the structures and functions that will allow us to succeed in the future.”

Layoffs at Big Tech Are the End of Special Job Perks

Until March of last year, Meta employees in New York didn’t have to worry about food, transportation, or laundry. These were part of the labor benefits. Some buses took them home at the end of the day, a free dinner service with takeaway options, and, in addition, they collected their dirty clothes.

“It’s a space with a lot of attention”

says Devi, a show creator at the Manhattan offices, who requested that her name be changed so as not to jeopardize the future of her career.

However, that same March 2022, as part of a cost reduction program, the laundry service was eradicated and the daily dinner service was delayed until after the last bus left the corporate center, which meant that the workers they had to choose between eating or returning to housing for free. According to Devi, the case caused a huge stir.

“It’s been fun to see a lot of high-paid people in the tech world complain about losing their free food. Since dinner was served to them at work, some of them had rented apartments in expensive neighborhoods in Manhattan, and so far they weren’t happy.”

he exclaims. Job perks, from cutting-edge gyms to private concerts to sushi bars, have become somewhat integral to the culture of huge tech organizations. Although they may seem outrageous in a time of layoffs across the industry, they are expected by employees and professionals say cutting them could have a real effect on companies’ role in hiring and retaining talent in the future.

Benefits in times of mass layoffs

“The problem for these companies that want to keep their megastars happy is that they’ve gotten used to being offered amazing packages. This can play into the war for wits, so the organizations that will offer the best benefits will get the best employees.”

suggests Grace Lordan, Associate Instructor in Behavioral Sciences at the London School of Economics in the United Kingdom.

Technological organizations began to provide benefits at a time when the parameters between the professional and personal lives of workers were fading. But Silicon Valley has been beyond the ping-pong tables. At Facebook, certain employees had think tanks. Apple workers have biweekly beer parties and the occasional surprise of some melody legend. On Google they recommended ‘massage credits’, to be redeemed on the premises.

The initiative was not just to keep staff in as long as possible in the workplace.

“Creativity and innovation usually arise in favorable spaces, places where the population can interact with pleasure, even during their break. Many of the raw elements that make up the fabric of creative ideas and positive engagement emerge, not during formal meetings, but in informal gatherings, like in the cafeteria or on the volleyball court.”

says Tomas Chamorro-Premuzic, professor of business psychology at University College London. From then on, job benefits in the office were part of the marketing discourse of big technology companies to capture ingenuity.

“If your office looks like a 5-star resort with everything integrated, there is a greater chance that employees will feel proud to work there, absorb the culture, have a feeling of belonging and spend more time inside. Bringing points from the non-union sphere to the workplace consolidates the idea that working is an integral section of your life, integrating your rest and personal recreation.”

says Chamorro-Premuzic. But the pandemic disease and the growth of remote and hybrid work models have come to define the effect of office perks. A study on Glassdoor, the web portal for anonymous company reviews, verified well over 70,000 postings from tech workers in the United Kingdom. It found that 8.3% of the reviews in 2019 said those benefits, such as the gym or free food. By December 2022, that number had dropped to just 4%.