Mouse Housers await their fate

A nervous spell has been cast on Disney’s famously sunny Magic Kingdom.

As the Walt Disney Co. prepares to lay off 650 staffers as part of a major reshuffling announced Tuesday, studio employees here and abroad anxiously await news of who will be handed a pinkslip.

The U.S. and international workforce will each absorb half the cuts, which will diminish Disney’s current staff by 20%.

A source confirmed that individual employees will receive their walking papers next week. Cuts, expected to be across the board, are designed to create maximum efficiency in each department rather than just eliminate high-level posts to trim overhead costs.

The sectors that will most feel the layoffs include film distribution, marketing, home entertainment, business affairs and finance. However, the cuts will affect all areas of the studio excluding feature animation, Pixar Studios, Miramax Films, Buena Vista Theatrical Production and the Buena Vista Music Group.

The Disney changes, unlike those at Paramount, do not involve bringing in any outside personnel. Disney toppers are understood to be taking pride in what they consider a “strong bench”; junior managers at many levels are prepared to assume the duties of their departing bosses.

Rumors had been swirling since mid-May that Disney was preparing to scale back, but nothing was confirmed by the studio until Daily Variety reported on July 12 that layoffs were looming. And it wasn’t until Tuesday that Disney revealed a specific head count as part of the major reorganization that saw the promotion of marketing prexy Oren Aviv to Walt Disney Pictures topper, the appointment of Mark Zoradi as prexy of Walt Disney Motion Pictures Group and the naming of Robert Chapek as prexy of Buena Vista Worldwide Home Entertainment.

Shakeup also saw Nina Jacobson ousted as prexy of Buena Vista Motion Picture Group. And while some say that Jacobson anticipated coming changes in the executive ranks, others contend that Disney chairman Dick Cook kept his plans very close to the vest, leaving high-level studio brass in the dark until Tuesday afternoon.

One person who was likely involved is Alan Bergman, prexy of Walt Disney Studios. Bergman received a promotion in December from his post of exec VP-chief financial officer and was credited at the time for his key role in shaping the Mouse’s overall strategy.

Now that Disney has revealed its plans to trim staff and reduce its annual output to 12-13 pics, word has made its way overseas, where the local offices of Disney’s overseas theatrical arm, Buena Vista Intl., and video operation, Buena Vista Home Entertainment, were mum on how they’d be affected.

Because of complex human resources laws, it may take as long as six months for the layoffs to take place abroad.

Observers were quick to question whether Disney’s top brass actually realize how time-consuming, expensive and destabilizing it will be to enact the cuts across the company’s patchwork of local distribution subsidiaries and joint ventures.”The decision by Burbank is quite the most bizarre I can ever recall,” commented one international distribution veteran.

It is unclear whether Disney has yet identified where the international cuts will be made, or whether the figure of 325 international pinkslips is just a theoretical target that has yet to be worked through in practice.

While chopping 20% of the Stateside staff may seem a relatively straightforward — though painful — task, replicating that in the foreign market will be a much more complex challenge.

“The U.S. is one market, one team,” a Disney insider said. “But in the international business, there will have to be a consultation process on a market-by-market basis. And there are different market conditions in each one; the size and nature of each local business is different.”

In some countries, such as Mexico and other parts of Latin America, BVI operates distribution joint ventures with other studios and thus will not have a free hand to downsize. In many European territories, labor laws offer much greater protection to employees than exists in the U.S.

“If you want to get rid of someone in France, it can take years, or it’s going to cost you a huge amount of money,” commented one senior international exec from a rival studio.

However, in France, Disney does its own distribution, after ending its joint venture with Gaumont, which could make the process of laying off staffers simpler.

Buena Vista already runs a smaller international operation than many of the other U.S. studios, so there’s widespread bafflement about where it will find flab to cut. And if it now has to embark on a laborious local consultation process to identify areas to cut back, that could cast a demoralizing shadow over its foreign ops for many months to come.

Separately, Aviv is expected to give his motion picture group a slight makeover, but a source at the studio says it’s too early to tell if he will appoint any new executives to work under him.

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