Things are changing at The Walt Disney Company, but what does it all mean for “The Most Magical Place on Earth”?
To say things have been “turbulent” over the last year at The Walt Disney Company would be an understatement. From widespread criticism of the current CEO to stock prices bouncing up and down, there’s no time like the present to be a Disney fan.
To focus on the positive for a second, The Wlat Disney World Resort recently welcomed a brand new roller coaster at EPCOT, the Park’s very first coaster. Officially called Guardians of the Galaxy: Cosmic Rewind, this exciting adventure through space is fun, quippy, and really unique, utilizing a new ride vehicle system. Guests are anxiously awaiting the grand opening of the new TRON roller coaster at Magic Kingdom as well.
But The Walt Disney World has faced its fair share of struggles as of late, too, most notably with the weather and the state of Florida itself.
For those who may not know, The Walt Disney World Resort was forced to close twice in the last few months due to Hurricane Ian as well as Hurricane Nicole, with both storms causing damage to the surrounding areas and counties.
While a one or two-day closure may not sound like much, Disney reportedly lost $65 million when it closed during Hurricane Ian. And sure, while Disney prides itself on making memories and offering Guests exhilarating experiences, Disney is a business that needs to bring in money like every other company.
There is, of course, the fables saga of Disney’s battle with Florida Gov. Ron DeSantis over the state’s controversial new bill. Word got out that the company had funded backers of the bill, known as the “Don’t Say Gay” bill, despite The Walt Disney Company preaching inclusivity and progressiveness.
This launched Disney into a firestorm, with people from both sides criticizing the company’s stance. Eventually, Disney CEO Bob Chapek publicly denounced the bill and pledged millions to the HCR (Human Rights Campaign).
It seems as though the damage had been done, at least with Republicans, as several conservative legislators, including Florida Gov. Ron DeSantis, took aim at the company and its special protections.
In a memo, Disney CEO Bob Chapek revealed that The Walt Disney Company is looking to slow things down company-wide, enacting a hiring freeze as well as gearing up for layoffs at the company.
Budget cuts are also involved in this move, something that came out of nowhere earlier this week. “I am fully aware this will be a difficult process for many of you and your teams. We are going to have to make tough and uncomfortable decisions,” said Chapek.
“But that is just what leadership requires, and I thank you in advance for stepping up during this important time. Our company has weathered many challenges during our 100-year history, and I have no doubt we will achieve our goals and create a more nimble company better suited to the environment of tomorrow.”
This bombshell came just days after Disney shared its 4th quarter earnings which included some impressive numbers, highlighting a potential error in Disney’s overall messaging.
According to the filing by Disney, the Disney Parks division of the company posted $7.4 billion in revenue for the fourth quarter of 2022 and a whopping $28.7 billion in total revenue for the fiscal year 2022, which ended on October 1, 2022. However, Disney’s stock price has continued to drop, seeing the biggest drop it has had in a single day in over two decades.
These layoffs and hiring freezes are coming to The Walt Disney Company soon, but what does all of it mean exactly for The Walt Disney World Resort in Orlando, Florida?
As reported by Orlando Sentinal, a union leader doesn’t think these actions will make their way to the Resort. Unite Here Local 362 President Eric Clinton said Monday that he had not heard anything from Walt Disney World about the hiring freeze or layoffs, stating that he does not think they will affect the Orlando Resort at all.
Disney currently employs an estimated 190,000 Cast Members across the company’s entertainment and theme parks divisions.
About 70,000 employees work specifically at Walt Disney World in Orlando, making it one of the largest single-site employers in the country. However, since the COVID-19 Pandemic started in 2020, employment has been quite shaky.
To take things to the West Coast, in late 2020, The Disneyland Resort laid off 32,000 Cast Members due to pandemic-related budget cuts. By June 2021, only half of those employees had returned to work at the Resort. Back in 2018, the Economic Roundtable sent a survey to 17,000 Disneyland employees, and of the 5,000 who responded, over 1 in 10 reported being homeless in the past two years.
A union representing Orlando-based theme park employees recently reported that employees need $18 an hour to survive. This has forced those working to ration meals and even medicine in order to make ends meet while pushing others away from a job they might otherwise love.
With how expensive the Disney Parks are becoming to visit, the amount of money Cast Members are making has certainly been magnified.
In the last couple of months, Disney announced that it would be increasing prices across several avenues. These price increases include a tiered system for Disney Genie+ and Lightning Lane, which could now cost the average family of four inside a Disney Park nearly $100.00 to ride Star Wars: Rise of the Resistance using the Lightning Lane.
To make matters even worse, Disney Vacation Club members are expected to be hit with a price increase of their own. Currently, active selling Disney Resorts, which include The Villas at Disney’s Grand Floridian, Disney’s Riviera Resort, and Aulani, Disney Vacation Club Villas are expected to increase from $207.00 as the current direct price to $217.00.
In one of our previous articles, we highlighted a new study that revealed Orlando’s tourism workers must earn at least $18 per hour to meet basic needs, according to a hospitality industry union.
The actual report was conducted by Unite Here Local 737 and found that nearly 70% of hospitality staff struggled to pay their rent or mortgage each month, with almost 40% having to worry about becoming homeless entirely. The union polled 2,415 hourly workers from these companies. A staggering 45% of those surveyed claimed they had skipped meals, and a quarter neglected to take the required medication because of the high costs. The median wage of those surveyed was $16.50 an hour, or $34,320 annually.
While there has been no confirmation from Disney, some of these labor shortages have reportedly led to longer and harder shifts for many Disney Cast Members. It is important to remember to be kind and patient with Disney Cast Members who are working to ensure a magical experience for all Disney Guests, whether it be at a Park or Resort.
Unite Here Local 362 has seen new people hired into these roles recently, said Clinton. Its contract with Disney also requires The Walt Disney Company to give workers notice of layoffs one week in advance, with employees having layoff protections based on seniority too.
There have been no filings to indicate layoffs are coming for The Walt Disney World Resort, yet that is. Under state law, companies are required to provide notice of such actions 60 days ahead of time.
A massive Union-backed protest is planned for Walt Disney World following the Union’s unsuccessful attempt at raising the minimum wage. According to the union, Walt Disney World Resort has only offered Disney Cast Members a $1 raise. The unions believe this isn’t enough and plan to protest on Wednesday, November 30.
So as of now, changes aren’t too likely, at least for employees working at Walt Disney World. A lot of the layoffs could be internal with The Walt Disney Company itself, though the top executives will most likely stay for quite a while. Bob Chapek had his CEO contract extended by three years just a few months ago, indicating Disney is fairly confident in his leadership.
However, as we mentioned, Disney stock crumbled to $86.75 after the most recent earnings call. That was just 99 cents above the stock price on March 23, 2020, just days after the company announced it was shutting down its theme parks.
In May, Chapek said the company has not had “too big an issue” attracting or retaining theme park employees, but McCarthy said Disney was dealing with “rising wages” and a “tighter labor market.”
With the Parks already facing labor shortages and a rocky reputation amongst union members, the decision to lay off a portion of the company as well as freeze hiring could have major effects on The Walt Disney Company and, subsequently, the Disney Parks themselves. Though, as of now, things look to be fairly steady at “The Most Magical Place on Earth.”
What are your thoughts on The Walt Disney Company?