Respected and Cherished

At the same leadership conference where I shook Josh D’Amaro’s hand, the one I wrote about in The Same Smile, he told us a story about Egypt.

Around 2011 he was running Adventures by Disney, the company’s guided group-travel business. That year Egypt went through a revolution, and the unrest went on long after it. Disney had just started selling trips there. He told us he was going himself, and that he was uneasy about it. What settled him was the group. Some of them had never left the country. They went because they believed Disney would keep them safe.

His point was that this is the most valuable thing the company has. People hand Disney their children, their savings, and in that case their physical safety, on the strength of a name. We were told that trust was to be respected and cherished. I believed him. I still think he was right.

That’s the standard I’m holding the company to here. My claim is narrow. In the weeks around The Same Smile, Disney spent that trust with its own employees. It let them learn about the next layoffs from the press. A senior executive denied a pattern that the company’s own letters had already predicted. And the cuts landed in a year of record results. Disney can cut costs. My objection is how it talks to the people it cuts and the people it keeps.

My bias is the same as last time. I left Disney recently, and not on good terms. Read accordingly.

The update

On November 3, Bloomberg reported that Disney plans to cut several thousand jobs, and CNBC confirmed it. Some managers have been asked to cut costs by up to 20%. (CNBC; Bloomberg) The number gets repeated loosely, so to be precise: it is a target for cost, which can be met by cutting roles or expenses. It isn’t a 20% cut to headcount, and it isn’t a cut to the managers themselves. The TV networks and the film studio are expected to be hit hardest. Disney declined to comment.

According to Bloomberg’s sources, the savings will be reinvested in film and television, technology, and the parks and cruise businesses, and the company has promised double-digit growth in adjusted earnings per share. (WDW News Today)

This would be at least the fifth round since D’Amaro took over in March: about 1,000 roles in April, several hundred in July, about 300 in September, and 100 to 200 in Experiences on October 28, mostly at Imagineering. I covered those in The Same Smile.

Hear it from us

Two days after the Bloomberg report, Disney’s streaming and technology organization held a town hall. That was my side of the company. I sat in meetings like that one for years.

The questions were submitted in writing. Business Insider saw screenshots of some of them. (Business Insider)

“Do we know when the cost cutting is targeted to happen?” a software engineer asked.

A veteran employee asked: “Would it [be] better for employee morale to first hear from mgmt about future employee benefit changes and layoffs, instead of hearing about these from the media?”

Two employees who attended said leaders gave no specific answers about whether cuts were coming or when. Afterward, on Blind, an anonymous forum that verifies work email, one employee called the meeting “forced positivity” and said leadership was “completely ignoring all the actual changes and issues destroying morale.” Before the meeting, a senior engineer had told Business Insider that the reports were “very demotivating,” even after a good annual review: “I’ve been through enough of these to know that doesn’t mean safety.”

Another engineer said people were trying to look more busy. Senior staff were going to meetings they would normally skip, to be seen. That’s what this kind of uncertainty produces. People put their effort into being visible instead of into the work.

Not every six months

On October 1, at a Bloomberg conference in Los Angeles, Lucas Shaw asked Dana Walden, Disney’s President and Chief Creative Officer, how there were still people left to fire. She called it “the snarkiest possible version of this question.” Then she said: “I would start with we’re not firing people every six months.” (Bloomberg; full interview) She said layoffs were “extremely painful,” and that she didn’t expect Disney to be at the front of the industry on efficiency targets.

Here is what the company had already put in writing before she spoke. On August 5, D’Amaro and the chief financial officer, Hugh Johnston, told shareholders: “We remain highly focused on reducing costs across the enterprise,” and “We are mid-stream in this work.” On August 24, the chief people officer, Sonia Coleman, wrote to employees about “involuntary staff reductions that have already begun in some areas and will continue into next year.” (CNBC)

Four weeks after Walden spoke, Imagineering was cut. Five weeks after, Bloomberg reported thousands more.

The Ankler’s response is the most accurate thing written about the interview: “Technically, she’s right. It’s happening a lot more often than that.” (The Ankler)

I can’t show what Walden knew about this particular round on October 1. I can show that the company had told its employees in August that the cuts would continue into 2027. Her sentence was literally true and misleading in substance, and she had reason to know it. Employees can read a calendar. Every answer like that teaches them to trust Bloomberg more than their own leaders, and you can see that lesson in the town hall questions.

“But let your communication be, Yea, yea; Nay, nay: for whatsoever is more than these cometh of evil.” (Matthew 5:37)

Record quarters

The cuts aren’t coming from a business in trouble, at least not on the parks side.

In the quarter reported on August 5, the Experiences segment set third-quarter records for revenue and operating income: $9.97 billion in revenue, up 10%, and $3.02 billion in operating income, up 20%. About four points of that growth came from a one-time tariff refund. The same release said Disney now expected to buy back at least $9 billion of its own stock this fiscal year, because “we believe our shares are undervalued.” (Disney Q3 release, SEC)

To be fair, some of the pressure is real. Linear television is shrinking, and the networks are where the new cuts are expected to hit hardest. Disney’s parks in Asia have been soft. I don’t run a media company, and I won’t pretend every cut is unjustified.

But a segment that just set records didn’t get there in spite of the people running it. Nothing a cast member did produced these cuts. They’re a choice about where the profit goes. The company chose share buybacks and growth targets, and it asked employees to cover the difference.

I also worry about the gap the plan assumes. The bet seems to be on a future that needs far fewer people, with automation doing the rest. In September, the company’s chief legal officer described a “transformation process” that includes “automating certain workflows.” I worked on Disney’s automation projects. What I saw was that the hard part was never the technology. It was the operations: the handoffs, the exceptions, and the upkeep that cast members absorb every day without anyone writing it down. Software reads that work. It doesn’t do it. Getting to the smaller company depends on the people the larger one is treating as disposable. In Have the Courage I wrote that the people with options leave first. I think these cuts help hit growth numbers the business couldn’t otherwise reach, and that the company is borrowing against its future to protect the short term. That’s my opinion. The engineers trying to look busy are what it looks like from the inside.

What trust buys now

Go back to Egypt. That family didn’t trust a tour itinerary. They trusted that Disney would make the right call when it mattered, with their children on the line.

In The Same Smile I wrote about Character.AI. Disney’s own cease-and-desist letter called its chatbots “sexually exploitive and otherwise harmful and dangerous to children.” (Axios) Since then, Business Insider has reported that Disney will pay about $60 million to hire 66 of its employees (Business Insider), and at the town hall, staff asked what that team would work on. I don’t know how a company that sells trust to parents squares that hire with that letter. I’m asking.

The same question applies at ESPN. Nicole Noren produced investigative work for ESPN’s Outside the Lines for twenty-four years and won Emmy, Murrow, and Peabody awards. She left when ESPN licensed its name to a sportsbook. “I’m not going to work for a gambling company and have blood on my hands,” she told Columbia Journalism Review in October, speaking publicly for the first time about her family’s experience with compulsive gambling. (CJR) ESPN’s sportsbook is now DraftKings, built into the ESPN app, with linked accounts since March. People with Noren’s judgment are what a trusted name is built from. She wasn’t heard. She left.

The title and the talk

At that conference, D’Amaro also told us never to use our title as our authority. Don’t talk down to cast members. He said it well, and the way he spoke to us that day, I felt respected. That’s part of why the smile works.

A title gives you the authority to tell people the truth before someone else does. Letting employees read about their jobs in Bloomberg, and then telling them the pattern is exaggerated, is talking down from the title. It’s just done by other means. The walk doesn’t match his own talk, and that’s my disappointment.

The family in Egypt believed Disney would keep them safe, and he told that story as proof of what the company was worth. In November, a Disney employee had to type a question into a Q&A box asking whether it might be better to hear about their own job from their managers instead of from the media.