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Disney combines theme park functions in prelude to job cuts

Behind-the-scenes operations of Disneyland and Disney World will be consolidated into a single unit.

February 19, 2009|Dawn C. Chmielewski

It's a smaller world after all at Disney's theme parks.

Grappling with the deepening recession, Walt Disney Co. announced plans Wednesday to shake up its parks and resorts operation, setting the stage for job cuts in the coming weeks.

Under the new structure, the behind-the-scenes operations of Anaheim's Disneyland and Walt Disney World in Orlando, Fla., will be consolidated into a single unit, led by Worldwide Operations President Al Weiss.

Disneyland Resort President Ed Grier and Walt Disney World Resort President Meg Crofton will continue to oversee the majority of the local staff. However, Weiss' group will take over certain functions that cut across parks, such as training, procurement, menu planning and merchandise development.

This eliminates redundancies that occur when, for example, each park orders its own customized version of a stuffed Mickey Mouse toy.

The changes were announced amid falling attendance and expectations that the yearlong recession has many more months to run its course.

Disney officials indicated that the changes would result in layoffs affecting its 80,000-strong workforce in its U.S. parks and resorts unit, but could not say Wednesday how many jobs would be eliminated.

Last month, the company offered buyout packages to 600 executives in its domestic parks division, which, in addition to the theme parks, includes Disney cruise ships and resorts in vacation spots such as Vero Beach, Fla., and Hilton Head Island, S.C.

Attendance at Disney's U.S. parks fell 5% in the three-month period that ended Dec. 27, compared with the same period a year earlier.

Disney has started this year with promotions aimed at boosting both hotel bookings by out-of-towners and park visits by local residents, such as free admission for people on their birthdays.

The parks and resorts division contributes about a quarter of the Burbank entertainment giant's operating income and revenue, but its business is sensitive to economic downturns and shifts in consumer spending habits.

"These changes are essential to maintaining our leadership position in family tourism and reflect today's economic realities," Disney parks Chairman Jay Rasulo said a statement.

Analysts say Disney is trimming costs in ways that are less obvious to visitors as it braces for what may be a protracted recession.

"What's happening may be anticipatory in nature," said John Robinett, senior vice president of Economics Research Associates, an entertainment industry consulting firm. "The impact of the recession has been muted at that point. . . . I think they are anticipating what's going to happen this year."

Rasulo said Disney would streamline its structure to simplify park operations -- and in the process, reduce overhead. He said the reorganization was a further step in an operational review begun in 2005 at Walt Disney Parks and Resorts, although he acknowledged that the bleak economy had accelerated the pace of the changes.

Some operations of Walt Disney Imagineering group also will be streamlined.

Chief creative executive Bruce Vaughn and chief design and project delivery executive Craig Russell will continue to oversee the development of attractions for all Disney parks and resorts. But the group will no longer maintain separate units devoted to development for resorts, entertainment and attractions.

A new global business development team will combine real estate and business development under Executive Vice President Nick Franklin.

The changes are intended to create one group that identifies development opportunities and park expansions, another that implements it and a third that is in charge of operations, even as the company eliminates jobs, Disney officials said.

"Organization changes require difficult decisions, including the elimination of some roles," Rasulo said. "These decisions were not made lightly and we know this will be a challenging transition. The people affected are our friends and colleagues."

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dawn.chmielewski@latimes.com

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