That Quarter Is Over

March 31st brought the largest point rally in the markets since the Great Depression and the close of why is probably going to be another dismal earnings quarter for Disney by many counts.  The conference call and updates are scheduled until the 5th of May after the close of the market (4:15 EDT).

There has of course been a lot of talk lately about the layoffs in California and Florida.  From the sites I’ve looked at (the Orlando Sentinel, Facebook and the website AfterTheMouse among others) there appears, as you would expect, to be no rhyme or reason to the layoffs.  Some people had less than 10 years, many had over 30 and many of each had never had a job anyplace else. 

It goes without saying, layoffs often don’t make sense from the outside looking in.  We don’t know what management used as the true criteria (and won’t probably, since anybody who knows is presumably still employed), nor do we have a good view of the org chart from before or after.  My own experience is that often there are easy cuts on paper based on the guidelines (the Pareto principle is true after all) and then there are the rest which are approximately equal. 

That makes them harder to surmise the value and the impact of a particular set of cuts, especially when nobody above you wants to hear about your ideas, they just give you your ‘fair share’ of pain to deal out as best you can.  That’s hard on managers too, and it often makes an already bad situation even more tense (hence why they call security guards to escort people, which is pretty much a standard HR practice these days).  Good managers can be suddenly seen as bad managers just because they had to deliver bad news or did it in a bad way.

The most dangerous assumption is that ‘what you see is all there was’.  Remember, Bob Iger said they left the profitability of the individual business units to each BU head.  What’s in the news right now with Parks and Resorts is only one BU, and Jay Rasulo is only one executive among a group of peers who each has made cuts and adjustments to their end strength and hiring plans.  ESPN cancelled hundreds of new position announcements and other Disney business units have been laying off people for some number of months. 

I’m not sure we have a picture of what the total company wide layoffs are.  The fact that many of them are just positions that won’t go filled makes the TRUE number of ‘people casualties’ even smaller than the quoted 2% of total people (700 positions of the total 1900 were empty before and now continue to be empty for instance).

UPDATE:  For what it’s worth, often from an accounting and cash flow perspective those empty position cuts still save the company money since those positions are often budgeted in ahead of time.  When the position isn’t filled, that leaves that money to go someplace else (or in this case just not be there to begin with).

All in all it’s a messy time for everybody involved.  Sending out our thoughts and prayers for everybody affected (and yes, in my book that still includes the people who didn’t loose their jobs and had to make tough decisions in addition to those that were let go).

Lets also pray that it doesn’t get worse from here and even MORE REAL cuts are needed.