Tuesday, January 08, 2013

Cut to the Bone

... and beyond.

... Walt Disney Co. started an internal cost-cutting review several weeks ago that may include layoffs at its studio and other units ...

Cuts are most likely at the studio, said two of the three sources, where the strategy has changed to focus on fewer films and rely more on outside producers such as Steven Spielberg's DreamWorks studio, which finances its own films and pays Disney a fee to market and distribute them.

It is also looking at redundant operations that could be eliminated following a string of major acquisitions over the past few years, said one of the sources. ...

I don't think that there will be big cuts (if any) at Disney's animation units, but you never know. (We'll dredge up Disney animation employment stats for the last three years tomorrow, and see if my thoughts are in line with reality.)

Earnings growth has stalled out at a lot of our fine, American companies. Over the past four years, corporate America has been able to goose profit margins by slashing payrolls and containing other costs, but those efforts are no longer bearing a great deal of fruit.

So, absent more expansion on the demand side (you know, more jobs and more money in the pockets of working stiffs?), we might be seeing more austerity on the private side of the economy.

(Walt Disney Animation Studios did have several rounds of layoffs a few years ago. When I told a reporter from Bloomberg about the downsizing and he wrote about it, management did not look on me and my big yap favorably.

Oh well ...)


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