In a sign that the recession is cutting into Walt Disney Co.'s parks and resorts business, the company said Friday that it eliminated about 1,900 jobs at its domestic theme parks.
The bulk of the cuts occurred at Walt Disney World in Orlando, Florida, where about 1,400 jobs were eliminated. About 300 jobs will be cut from the Disneyland Resort in Anaheim, with the remainder coming from corporate headquarters in Burbank.
Some 1,200 people were laid off and 700 open positions will be left unfilled in the second phase of a reorganization begun in 2005 that was accelerated by the recession. The company did not say whether it would book a severance charge, or how much the cuts would save.
"These decisions were not made lightly, but are essential to maintaining our leadership in family tourism and reflect today's economic realities," said Disney spokeswoman Tasia Filippatos in a statement. ''We continue to work through our reorganization and manage our business based on demand.''
The theme-park operator is consolidating oversight of operations near Orlando, Florida, and Anaheim, California, Jay Rasulo, chairman of the division, said in an 18 February statement. The cuts include 50 people who took voluntary buyouts that Disney offered to about 600 domestic park executives in January.
Travel experts say the vacation industry is reeling from the effects of the weak economy. Consumers are worried about job security as the nation's jobless rate reached its highest level in more than a quarter century. Businesses also are curtailing trips. All of these things are taking a toll on hotel bookings and air travel - two bellwethers of the health of the travel business.
Orlando, home to Disney's sprawling 25,000-acre Walt Disney World resort, has been particularly hard-hit. The number of passengers traveling to Orlando International Airport declined 14 per cent in February compared with a year earlier, the Greater Orlando Aviation Authority said. Hotel bookings are off by double digits, according to Smith Travel Research, which tracks the lodging industry.
These grim economic indicators don't bode well for Disney's parks and resort business, which accounts for more than a quarter of its operating income and revenue. The company declined to provide information about park attendance before its second-quarter results are released on 5 May.
Attendance at Disney's domestic parks fell 5 per cent in the three-month period that ended in December. Disney started this year with promotions aimed at increasing attendance, such as free admission for people on their birthdays and a deal that offered a week's stay at a Disney hotel for the price of four nights.
(Also see: Disney halts Hong Kong park expansion, angers government)