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Layoff rumors at Disney Studios

June 07, 2006|By Vince Lovato

BURBANK ? Despite speculation that Walt Disney Studios plans to lay off 10% of its workforce this summer due to job redundancy created by its purchase of Pixar in April, experts say the layoffs would be routine and would not have an impact on the local economy.

Disney spokeswoman Heidi Trotta would not confirm or deny the layoffs.

"We are constantly evaluating our business to make it better and more efficient," Trotta said Monday.

Media companies usually streamline workforce after a buyout or merger, said Gigi Johnson, a lecturer at UCLA's Anderson School of Management.

She has heard conflicting rumors about the layoffs and pondered where they might hit.

"I have heard the rumblings," said Johnson, who has many students who are Disney employees. "And I've talked to friends who work at Disney who weren't aware [of impending layoffs].

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"Still, it would not be surprising if there was a reduction in live-action production staff and an increase in animation," Johnson added. "The Pixar purchase was looked at for the creative talent it brought Disney. [Pixar] is a creative, fun spontaneous environment."

A company as large as Disney could easily reduce its workforce without firing employees, said Glendale Community College Assistant Supt. Steve White who used to teach media business.

"If it's only 10%, they might do it through attrition or through buying people into early retirement," White said. "It would be bad for morale for the people who remain if they fired people. You can usually handle [the reduction] in a year or two [of attrition] and you have to keep the institution going."

Disney is one of the major employers in Burbank and participates in many philanthropic ventures, Burbank Community Development Director Sue Georgino said. "I haven't heard anyone getting any notification that Disney is laying anyone off. But we know that there is a change in this environment very often."

When Warner Bros. and CBS bought and merged the UPN and WB television networks, creating the CW network, it took some time before the employment climate settled, she said.

"We have very low unemployment rate in this city," she said. "The media industry is so strong and there are so many opportunities for media employment here."

Disney is a publicly traded company that reported a 22% dip in quarterly earnings and might want to soothe investors' minds, Johnson said.

"Sometimes they float a rumor to see where the market goes," she said. "If shareholders think they will get the same product with less cost, that makes them happy."

But layoffs would not have a major effect on the region, Johnson said.

"Some media people will shift from one company to another using the same skill set," she said.

"It would not have an impact on the local economy because there are so many new media companies in the area. The employees move back and forth with great fluidity."

The media industry is in a state of constant flux, Johnson said.

"So [the layoffs] might have nothing to do with the Pixar deal," she said.

"Every sector of the business is changing almost weekly, if not monthly. So they may have a need to re-deploy."

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