Disney plans resorts reorganization, layoffs {Merged Threads}

[Ian]

Ahh but don't forget ... they also did away with the Character Caravan that they instituted "based on results of guest feedback surveys' and replaced it with Extra Magic Hours that they had done away with "based on results of guest feedback surveys."

[GothMickey]

If I thought it would do any good, I'd get involved.

But Disney doesn't care ... they've got a built-in excuse right now for all these cutbacks and they're going to use it to their full advantage.

They'll cut back 20% and when the economy recovers they'll restore 5% of what they cut and all the Disney dweebs will applaud them for returning Fantasmic to a nightly show.

You never know where we can go with this. Who knows who would get behind it? Maybe Roy sees the mess and joins. Maybe the hedge funds see it our way. We'll never know unless we try. The question is, who has the time to actually try?

[GothMickey]

Ian...love the sarcasm...reminds me of the cuts Disney implemented after 9/11...the economy did rebound and what did we get...Carousel of Progress back on a daily schedule...POP still unfinished, etc..

Sadly, this is what we come to expect from the management in charge. This is why I do not feel it is low for us to call for the heads of these inept people. They are running things into the ground and ruining it little by little. Holmes, Crofton, and for sure Rasulo need to be shown where the exit doors are with no way back inside.

[lockedoutlogic]

Many people hit the target here....

the simple disparity in the actual number of rank and file employees is the biggest...possibly the only....reason as to why the service at DL is superior to WDW...all things being equal.

But that 60,000 number is not taken seriously enough by WDW critics when they (we) wonder why things have "gone down hill"...

It is the whole enchilada....the beginning, middle, and end to why things have taken a drastic downturn since the 80's...

And think back: hasn't it been roughly since 1989 that things have started to twist? Right about time of MGM...and typhoon....and caribbean...the grand floridian...then yacht...beach....old key west....boardwalk....port orleans.....all stars....the ill advised and timed animal kingdom park and resort areas....

It is the legacy of the "Disney Decade" as Mikey coined it.....the labor simply has become too much of a burden to maintain standards (which really have been gone except in pockets like horticulture....weddings.....some recreation for quite some time) and is a boa constrictor around any future development.

There just aren't enough hands available on the ranch.....that 55K-62K number of employees....while impressive....is the minimum number needed...almost a skeleton crew

As it currently stands i would estimate they would need 70-75,000 skilled, qualified, courteous employees to get anywhere close to the old WDW standards right now.....not with any future resorts or attractions....

These are the facts....
The labor requirement is the main issue at WDW today, tomorrow, going forward. Both from a financial and logistical standpoint. They will not increase pay and benefits to attract more or better employees....it is not acceptable for a company cash cow on the NYSE (by the way....as a tangent....if anybody is interested....WDC is trading at about 16....if it drops below 14 with the american economy still standing is some recognizable form....GET IT! people will always come back to mickey)

Anyway - so they won't/ can't pay more for help. So that means they logistically are going to be strapped forever moving forward. Every corner has been scoured....every tree shaken....there's just no employees left in central florida to relieve this problem.

That is the issue...and it can be tied directly or indirectly to almost every single complaint at WDW....and will continue to do so unless seismic shifts in policy, demographics, or operations occur.

[Ian]

I couldn't agree more, sir. That's why I absolutely cringe every time someone suggests or asks about when Disney will add a 5th gate in WDW.

Quite honestly, if I was suddenly made king of WDW, I would go the opposite way and start shuttering things to try and bring the employment numbers under control.

[princessgirls]

I couldn't agree more, sir. That's why I absolutely cringe every time someone suggests or asks about when Disney will add a 5th gate in WDW.

Quite honestly, if I was suddenly made king of WDW, I would go the opposite way and start shuttering things to try and bring the employment numbers under control.

Ian... please apply for the CEO of Parks!!!

Please, Please...
they need you!!

Julie

[Ian]

Honestly ... I think there are literally tens of thousands of people who could do a better job running this company than the people who are running it today.

There's this notion out there that all people in high level position are somehow qualified to be there and that often couldn't be farther from the truth.

[lockedoutlogic]

I couldn't agree more, sir. That's why I absolutely cringe every time someone suggests or asks about when Disney will add a 5th gate in WDW.

Quite honestly, if I was suddenly made king of WDW, I would go the opposite way and start shuttering things to try and bring the employment numbers under control.

I wouldn't go quite that harsh.....

But i would fundamentally shift how things would be run.

The first thing I would do is cut a deal with a large, reputable hotel operator (Marriot....starwood...etc) to take over the operation of the disney resorts....
...yes....that is a necessary step. The resorts probably account for 20K or so of the employees....and disney could maintain their current level of service (which frankly...isnt' great) by letting another company take part of the pie and the employees off their hands. In many ways, a company that is dedicated to hotel service would be an improvement (i.e.....they might just pay to have good people....something disney would not)

Beyond that...there are other areas that Disney could farm out.
Now don't get me wrong....i hate farming out of tasks as it has become a rampant and debilitating american business practice...
But Disney is not gonna pay for experienced and qualified help. They often have those types in their ranks....but they either:
a. get frustrated about lack of challenge and mobility and leave
b. apalled by minimal pay...and leave
c. a delightful mixture of a and b

But that's it. Casting has been leaking like a sieve for years.....they will never be able to staff any 5th park....and might not be able to hold the 4 that they've got for very long

They need to trim down their labor committment. Hold onto to what you consider the core.....parks....vital operations....I would recommend transportation....waterpark operations (for liability)....but others can go.

Now if you do that.....throw a little more money to the ant army....I guarantee that things will perk up. And maybe you'll have enough to run expansions efficiently....

This has to happen....there could be 15 million people in Orlando.....and still you won't get enough of the type of employee you want for $6.50 an hour

Or Congress could raise the minimum to $15 and hour.....then all problems would be solved. (joke)

[Ian]

Or Congress could raise the minimum to $15 and hour.....then all problems would be solved. (joke)

Yep ... all problems like this would be solved, because every U.S. based company would be bankrupt, we'd all be out of work and starving, and would wouldn't give a whit how WDW was run since we couldn't afford to go there anyway!

I'm not 100% sure I agree on outsourcing the hotel management, though. I mean the issue is bad service and if you want to solve that problem I'm not sure you do it by replacing the staff with the highest incident of guest touchpoints with outsourced talent.

I would much prefer that they outsource any and every back-office, non-guest touchpoint position on property first. And I also would at least consider completely shuttering a resort or two. I really think they could do away with an All Star Resort and maybe one of the mods.

[cgriff]

Hey LockedOut... Who is it that the newspapers and nightly commentators are constantly telling us are the "gentle, hard-working people, who are just looking for honest jobs, and who are willing to do the tasks that no American wants to do, for half the price"?

[Ian]

Hey LockedOut... Who is it that the newspapers and nightly commentators are constantly telling us are the "gentle, hard-working people, who are just looking for honest jobs, and who are willing to do the tasks that no American wants to do, for half the price"?

Man, there are tons of them employed at WDW. Have you ever talked to the average member of Mousekeeping?

I don't mean to overgeneralize, but many of CM's that I come in contact with who aren't front-line CM's (i.e. those in guest facing roles) are definitely "gentle, hard-working people, who are just looking for honest jobs, and who are willing to do the tasks that no American wants to do, for half the price."

[doodleboy]

I don't mean to interrupt the train of thought or subject matter, but how is this even happening? All I read about on this board lately is how crowded the parks have been, even more so than in past visits for those reporting. Is it that WDW is giving away the farm with these crazy discount offers and finding that they would need to double the number of people coming into the parks for it to work? Sometimes I think it is better to entertain fewer guests at a higher price to make things work. This strategy must not be hitting the break even point by any means. What stinks for regular park goers like us is that the parks are packed with people there for the deal.

[lockedoutlogic]

Hey LockedOut... Who is it that the newspapers and nightly commentators are constantly telling us are the "gentle, hard-working people, who are just looking for honest jobs, and who are willing to do the tasks that no American wants to do, for half the price"?

You'd be shocked at how much better things would get if Disney would just take the hit and pay a couple of dollars more an hour across the board.....

it would be amazing how quick and seamless the transition to better overall CMs would be.....i would bet on it.

but no cost may be incurred at the Cash Cow.....rule #2 of the WDW Bible (King Eisner Version)

[JRocker]

I guess things have changed a lot in the last two years.
We went to WDW in 07 and DL that summer, and for us the CM's at DL were rude compared to WDW CM's.
I guess my next visit to the world will be interesting.

Yes, they need to pay the CM's better, without a doubt. However, Disney's main obligation is to the shareholders. Raises cost money, money that the shareholders will not like to see spent.
Significant raises for how many thousands? Over the course of a year a single dollar per hour raise for ten thousand employees will cost a touch more than what you may think.

Heck yes they need a raise, but we are talking millions of dollars (yes millions) involved in a significant raise. This would be unacceptable for the owners (shareholders).

This does go way back to the Eisner days. If the CM's had gotten the cost of living raises that they deserved over the years, this wouldn't be a discussion.

The question I have now; What kind of raises have they gotten since Eisner left? Has it gotten any better?

[GothMickey]

I don't mean to interrupt the train of thought or subject matter, but how is this even happening? All I read about on this board lately is how crowded the parks have been, even more so than in past visits for those reporting. Is it that WDW is giving away the farm with these crazy discount offers and finding that they would need to double the number of people coming into the parks for it to work? Sometimes I think it is better to entertain fewer guests at a higher price to make things work. This strategy must not be hitting the break even point by any means. What stinks for regular park goers like us is that the parks are packed with people there for the deal.

Just because the parks are doing better than expected attedance wise, doesn't mean Disney is raking in the dough. People are not buying the merchandise, cutting down their expenses, therefore cutting into the profits of WDW. Also, the 4/3 promotion, despite working (getting people to WDW) is also cutting into the margins since 3 of those nights are for free.

[DizneyRox]

Just because the parks are doing better than expected attedance wise, doesn't mean Disney is raking in the dough. People are not buying the merchandise, cutting down their expenses, therefore cutting into the profits of WDW. Also, the 4/3 promotion, despite working (getting people to WDW) is also cutting into the margins since 3 of those nights are for free.

True, but 4 of those are rack rate!

I think the bigger problem is the lack of merchandise. WHen you sell a t-shirt for $30 that only costs $.50 you make a lot of money. I don't think the profits are really in the hotel and parks as much as the food and merch.

[lockedoutlogic]

True, but 4 of those are rack rate!

I think the bigger problem is the lack of merchandise. WHen you sell a t-shirt for $30 that only costs $.50 you make a lot of money. I don't think the profits are really in the hotel and parks as much as the food and merch.

Realistically.....probably 80-90% of the profit at WDW is generated solely through merchandise.....

food garners a little bit....

room rates and tickets do nothing to add to the coffers....they cover part of the operating costs only....

Any change to the souvenir purchasing habits....and i'm sure there has been a measurable change....has drastic consequences to what they want out of the WDW operation....

Merchandise is the reason behind alot of the decisions that are made.....it is why they gave away food at less than going rate under the original DDP....it is why they don't blink to give away rooms and tickets under their current promotion....the model works AS LONG as people drop hundreds or even thousands on merchandise that is manufactured sweatshop style in China for a few pennies on the dollar.

but if anyone really wants the breakdown....it's still available in the annual report to stockholders....

it's all there "hidden"...in plain view....in the numbers

[DizneyRox]

Realistically.....probably 80-90% of the profit at WDW is generated solely through merchandise.....

Funny seeing as there hasn't been anything worth buying since about 2002...

2000, I spent $1700 at DTD one visit. Mostly in Gourmet Mickeys I believe it was called at the time. Fast forward to 2008 and I spent less than $150 on merchandise for an entire trip. I think I'm being generous with the $150 too, I almost can't believe it's that low!

Hmmm....

[Ian]

Yeah, Rox, I agree with you. I think Disney is going to be faced with slumping merchandise sales well beyond this economic slowdown simply because they're merchandise mostly stinks now.

I mean really ... who flies 1,000 miles and spends thousands of dollars to come home with a junky plastic playset of Mickey Mouse Clubhouse characters that they could buy at the local Wal-Mart for $8 cheaper?

I know for a fact that merchandise sales have been slumping below acceptable levels for at least a year now and that really pre-dates the worst of this economic crisis.

[lockedoutlogic]

We frequent offenders know that the disney product sold in Florida has declined steadily since the start of the Eisney era....seriously....

but....that doesn't mean that there aren't tens of thousands of cheaply constructed plushies pedaled each day during a boom period.....and it cost disney practically nothing to manufacture, ship, and sell the product.

Even if the merchandise is bad in comparison to the past....there's no denying that they still sell tons of it....and that it is a ridiculous high profit yield....

Why does disney want you to come to WDW repeatedly? to "experience the magic"? hardly
eat at cosmic rays? ....well....its nice...but

perhaps it's to buy the junk? at a 2000% profit margin?

That might just be it....