Punch out, Goofy: Disney Parks banishes nearly 2,000 Mouseketeers

The job massacre at Disneyland and Disney World was far worse than we knew. Two weeks ago, Disney wasn't copping to a number for its domestic layoffs, but bystanders put the figure at around 450.

They weren't even close. In truth, there are now 1,900 fewer people punching the clock in Fantasyland.

The law says that employers only have to file advance notice of layoffs when more than 500 workers are eliminated at one site. Because Disney spread its hatchet-work around the organization, the end came without a firm notice, but employees will at least get 60 days' paid severance. Disney has also evaded the ire of the unions (and bad publicity) by simply cutting non-unionized employees instead.

Recessions gut discretionary luxury spending, and that hits Disney where it lives. When times are tough, you may go see a $11 movie, but you won't spend $200 a day to see the living DVD ads of Walt Disney World. The $75-a-day gate entry has finally come home to roost for the company, which doesn't seem to have a foul-weather strategy for its high entry prices.

In Orlando, where the most pink slips were handed out (I wonder if Disney's pink slips have glitter on them?), 2.3% of the former workforce is now gone, both through restructuring and old-fashioned firings. It's the biggest hit to the parks since right after the attacks of 2001.

Tourism drop-off in Orlando has been so severe -- more than 26% off last year, the worst performing market in America -- that in February, the county took in 29% fewer occupancy taxes this year compared to 2008, plunging the local economy into further crisis. The local Convention and Visitors Bureau is so alarmed that it's doing something that CVBs rarely do: It's petitioning hotels and resorts for its best discounts and promoting the deals itself. So far, Orlando's tourism honchos maintain and advertise a list of hotels offering freebies of some kind (free nights, free golf), plus a "Deal of the Week" that gives at least $50 more in add-ons away to customers.

Are the lines at the Disney parks shorter? Not really. There are a number of capacity-controlling tricks, such as running ride vehicles less frequently, that keep queues at the expected levels, and there are also plenty of visitors who will pay to enter the parks but scrimp everywhere else along the way, ignoring souvenirs and other splurges.

Disney is throwing some deals at the public, but all of them come with strings attached, such as requiring stays at the resort's own hotels (hotels located just a few miles off property can often be had for half the rate). One recently announced deal promises free meals for those who stay at least five nights at the resort, which is too much of a time commitment if you only want to visit a park or two. Disney's Dining Plan, as it's called, also has the obnoxious effect of cramming all the sit-down restaurants with participants and requiring guests to plan ahead with reservations for every meal of their stay, which takes the spontaneity out of a Disney visit. But so far, Disney has not offered to simply bring the price of admission down for out-of-state vacationers.

Both SeaWorld and Universal are putting the final coats of paint on skyline-changing roller coasters that they hope will buoy them in what's otherwise a stormy season. Disney World, though, has no big additions on the horizon, and it recently declared its Hong Kong park all but frozen in amber. I wouldn't be surprised to see more job cuts later on.
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