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David Koenig
Get in Line to Resign
Last week, Walt Disney Company employees received an invitation to resign through a "Voluntary Separation Program" (VSP). Of the 4,000 resignations sought company-wide, only 250 will be at the Disneyland—a reflection both of the resort's short-staffing and its seniority-minded layoffs of the past five years. The park already has been cutting away at the bone.

As cast members make their decision, they should understand one thing: this is not an offer for "early retirement." No going away parties. No membership in the Golden Ears Club. This is, clear and simple, termination.

And, employees who don't go along with the Voluntary Separation Program may be victims of the Involuntary Separation Program that inevitably will follow. Sort of like being offered a life preserver if you jump—so we don't have to throw you overboard.

As Disneyland Resort president Cynthia Harriss explained in the letter to cast members, "While we hope to achieve our reduction goals with the VSP, an involuntary layoff with a lesser severance package will be required if an insufficient number of cast members participate. It is expected that the VSP will be available on a one-time basis only."

Those interested must return an Election to Participate form to the compensation department no later than April 27, with the actual "separations" taking place through May. Those who sign up, though, are not guaranteed inclusion. "In order to ensure that our operations are not negatively affected," Harriss wrote, "the Company retains the right to disallow participation of an otherwise eligible employee."

The offer includes a one-time, lump-sum payment based on years of service, paid at the time of termination. Service is determined by the time spent continuously working for the Company since one's most recent hire or rehire date, and is considered in whole year periods.

The Team Disney building behind Disneyland
The Team Disney building behind Disneyland

Cast members employed for less than one year can apply for payment equal to 10 weeks of their weekly base pay. Those working one to four years may be paid 12 weeks of base pay. Employees of five or more years are eligible eight weeks of weekly base pay plus one week for every full year of service. Severance payments are taxable and subject to tax withholding requirements.

Health, dental and vision insurance coverage continues through the employee's "severance period" (the number of weeks they receive severance pay for), after which the employees have 60 days to decide if they want to take over the coverage at their own expense. Life, dependent life, accidental death and dismemberment, and long-term disability insurance coverage end at termination.

Unlike retirees, voluntarily severed cast members don't get the usual perks; no silver passes, main gate passes or employee discounts after termination. Employees have to turn in their passes and employee ID cards on their last day.

They are being offered, at no charge, "a career transition workshop" conducted by one of the largest outplacement firms, Drake Beam Morin.

Cast members face a true dilemma. Do they give up plans for a long Disney career and a formal retirement, or do they risk being terminated a month later—with no short-term payoff?

"The first letters have arrived, and in some cases have been VERY welcome," says one cast member. "I'm told that in one case it's worth almost a year's pay to the recipient. For everyone else, there's a lot of FUD (Fear, Uncertainty, Doubt) going around. It's gotten so bad that someone took it upon themselves to distribute a flyer declaring Disney a 'no offer discussion zone' in an effort to discourage any comparative talk, since the offers are based on a term-of-service formula."

For some, the park's anti-seniority bias is making the decision easier. He continues: "Any salaried position with more than five year's seniority has been made to feel very uncomfortable over the last few years, and there is no sense of being wanted today, or even being considered important in any way. The offers for these folks isn't big enough to warrant blindly jumping in, and a lot of resume buffing is going on during company time. A lot of people I talk to expect to leave, however reluctantly, in order not to lose a little something of their time at The House That Mouse Built."

At least, VSP volunteers know what to expect—unlike those who pass on the offer. Facilities management, for example, gives no weight to promises that they "have nothing to fear if they choose to reject their offers," since they are "too valuable" to the company and certainly will be spared from the cutback axe.

Seemingly in anticipation of the changes, furniture is flying at the Team Disney Anaheim building. "There is a LOT of bump-and-shuffle going on at TDA," reveals an insider. "The official version is just another reorganization of space, but a lot of office furniture is going out to Property Control. The engineers are having to give up their private spaces, and in an area just slightly larger than they used to have by themselves, are now expected to operate with up to three others. The space now available to them is just big enough to keep their computers and telephones so that they can check their voice and e-mail."

Disney expects the 4,000 layoffs to translate into $400 million in savings. What defies explanation is how a bottom line-minded company could have that many "dispensable" positions—and then try to cut back with an offer most appealing to its most experienced employees.

I have a better suggestion: rework Mr. Eisner's bonus plan. His current, incentive-laden contract includes a comparatively low salary with any additional income based on performance. As the C.E.O. explained to dubious shareholders a few years ago in Anaheim, if the company does well, he does well. If the company suffers, he suffers.

Well, in 2000, the Walt Disney Company had about its weakest performing year in Eisner's 15-year tenure. For that, according to the Orlando Sentinel, he collected bonuses and stock options worth $72 million. Imagine how many layoffs there would have to be if the company had had a good year…

Get in Line to Resign

ABOUT THE AUTHOR

David Koenig is the senior editor of the 80-year-old business journal, The Merchant Magazine.

After receiving his degree in journalism from California State University, Fullerton (aka Cal State Disneyland), he began years of research for his first book, Mouse Tales: A Behind-the-Ears Look at Disneyland (1994), which he followed with Mouse Under Glass: Secrets of Disney Animation & Theme Parks (1997, revised 2001) and More Mouse Tales: A Closer Peek Backstage at Disneyland (1999); all titles published by Bonaventure Press.

He lives in Aliso Viejo, California, with his lovely wife, Laura, their wonderful son, Zachary, and their adorable daughter, Rebecca.

You can contact David here.

LINKS

Click here to go to David's main page for a list of archived articles.

Visit MouseShoppe to purchase copies of David's books. (Clicking on the link opens a new window.)

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DON'T FORGET:

Click here to go to David's main page for a list of archived articles.

Visit MouseShoppe to purchase copies of David's books. (Clicking on the link opens a new window.)

Click Here to Pay Learn MoreAmazon Honor System

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