BREAKING: Shanghai Disney Puts Financial Strangle-Hold on Domestic Disney Parks

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Shanghai Disneyland is behind schedule and over budget, so Disney Parks will be looking to shave some money off their operational budget by cutting labor hours at both the Walt Disney World and Disneyland Resorts.

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According to inside sources, the Disneyland Resort saw a 20% cut in labor costs from non-profit locations starting at the beginning of the month, this includes positions such as attractions, guest relations, custodial, entertainment, and more. Walt Disney World will see similar cuts starting this week, such as the cut of front desk curbside greeters at all resorts. All front desk and concierge cast members will also only be offered only up to 32 hours a week once the cuts are in effect. Other departments will have similar restrictions, but we could not confirm a complete list.

Entertainment cuts are coming as well, such as the removal of the 2nd Fantasmic! show on evenings until Easter week and only one nightly performance of the Main Street Electrical Parade through the entire month (a month which is typically quite busy thanks to Spring Break and Easter). Other entertainment cuts have been rumored, such as various characters meet and greet experiences being permanently removed, but none are confirmed at this time.

This isn’t the first shakeup Disney has made since the Shanghai project financially got out of hand. Just a few weeks ago there was a massive shakeup at Walt Disney Imagineering in an attempt to prevent such projects from falling apart again. However, these new changes affect cast members on the much lower end of the pay scale, many of which count on the longer hours in these seasons to make a decent living. Many have voiced concerns over the cuts and that they may have to look for work elsewhere in order to pay their bills.

Disney has made no public statement on the cuts as of yet.

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About the author

Tom Corless

Tom has been regularly visiting the Walt Disney World® Resort from the time he was 4 months old. While he has made countless visits in the last 28 years, he did not become a truly active member in the Disney fan community until the summer of 2007, when he decided to launch the WDW News Today website and podcast. Tom has since become an Orlando-local and is a published author on Walt Disney World.

133 Comments

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  • The website Disneyleaks predicted that Shanghai Disneyland was way behind schedule and over budget in the summer of last year. What took you guys so long to catch up in the news cycle?

  • Pls give us some information about construction progress in shanghai – many people planning a trip like me are now confused if they can hold the opening date …

  • This company is creating jobs with all their New Attractions and Franchises at their parks. They Own Stars Wars, Indiana Jones, Marvel, the Muppets and some Wizard of Oz rights which they spent good money for and now can provide new attractions and characters through out the resort. The Disney China project is on Schedule with ticket sales coming in March. People lined up for blocks during a promotional event for the park. The money spent on the park comes from their acquired capital and investments over the years it does not come out of profits made for the current year.

  • How’s this for an idea: Cut back Iger and Staggs to 32 hours a week — and only pay them for that. In total compensation, Iger makes around $22,115 an hour. Eight hours a week at 52 weeks a year saves Disney $9.2 million. In base compensation, Staggs makes a measly $961 an hour. That would only save Disney about $400,000 a year, but still — $9.6 million could be put to good use, and this way Iger and Staggs would stand in solidarity with their fellow cast members, something I’m SURE they would like to do.

  • There are certainly some well informed cast members who list decades worth of events that affect Walt Disney’s cash flow and attendance, who explain what full time employees think of the College Program participants and the real life problem of a livable minimum wage that affects all of the United States. I commend you.

    There are a few items that I did not see mentioned and these are capital expenditures, CapEx, which are funds used by a company to acquire or upgrade physical assets such as property, industrial buildings or equipment. CapEx will be amortized over several years versus the labor budget that is scaled up and down based on business needs but both require cash-flow management.

    1. The billion dollar Disney MagicBand project and the annual upkeep for that. Note Shanghai Disneyland will rely on guest’s mobile phone apps verus MagicBands.
    2. The cost of Avatar and Rivers of Light for Animal Kingdom and the Frozen overlay for Norway’s pavilion in Epcot’s world showcase.
    3. The cost of Disney Springs (shopping, dining and entertainment center). Competitors produce E ticket attractions. Disney produces shopping malls.

    I think Shanghai Disneyland will pay dividends in ten to twenty years when Disney’s intellectual property is ingrained in Chinese kids. Imagineering needed someone like Bob Weis to get it in shape. The cost and lead times for Imagineering projects was not competitive. I’m not sure if that was Bruce Vaugn’s or Jay Rasulo’s fault but both are leaving the company. Look at the speed and cost that Universal can produce attractions at.

  • I’m left of left of Eddie!! We all know the little guy gets the short end of the stick in life and it’s caused by the imposed money system!! I believe in true freedom from systems, in free land, food and water!! But since life is not fair you have to find ways around the system!! This article has a headline that is going after one particular company in a biased way!! You heard one of the employees Harry above say here that they get Healthcare, a Pension, and Higher than Minimum wage without having to go to an office or corporate setting.

    • I hope that is a joke but if it isn’t even he admitted about Disneyland that it is a business and the harsh reality is that it costs money to expand and grow.

      • Yes but Walt was about the people. He opened Disney for a safe and reasonable place for people to take there families for a good time. Now a days most families can’t afford to take a vacation at Disney, it is too expensive. They are replacing a lot of there workers by offering college students jobs in the college program and they barely make enough for there room and board let alone food. I feel that the men and women that work for Buena Vista Construction are essential personnel, They are the ones that make everything look so real and keep the fantasy in Disney and they seem to have been the hardest hit by this layoff

  • It really does not matter to the cast members that have been selected for layoff or hours cut as to what division’s bottom line is being bolstered.

    I was a week away from committing to a week long WDW vacation for my family. It had already lost some of the “Magic” with the extend of construction within Disney’s property. Now with news of larger crowds, higher prices, and less cast members, it’s time to reconsider the true value we would be getting for our vacation time and money.

  • Who thought opening another park in China was going to be a good idea? Yes, I know there’s a billion people there, but it is a communist country which doesn’t allow its citizens to have Internet ( amount many other things). Until a few years ago they regulated how many children you can have and before that, female babies were aborted. They are a large reason why the US has lost jobs and had/ has a struggling economy.

    Imagine trying to get little things done there… No / limited internet, no safety, no child labor laws. Etc.. What a mess and what a terrible idea. I’m actually surprised more Americans aren’t outraged by Disney opening and profiting ( or trying to) in a communist country! Another example of Disneys greed and their finance team making decisions and not bothering to get their PR depts input. Sad.

  • In my opinion Diseny needs to let each park pay for itself. And if it can’t shut the park down. Being all over the world has to be a financial drain. I pray for myself and my fellow cast members that hours pick up. So far this hasn’t affected my hours. Thank God for the union.

  • Fascinating Read.

    As to Shanghai, of course the costs are soaring. As it’s in China, the odds that this continues are about 100%.

    Contrary to what most understand about foreign enterprise and ‘investment’, funds allocated to Shanghai are sunk and will continue to sink as part of a calculated risk that TWDC has taken over decades of consideration. As a junior-partner in the Shanghai venture, Disney is likely having every single penny (fen) of their proposed plans scrutinized and doubted by the Chinese majority. It must be very painful. I’m sure the discussions go all the way down to the kind of cups they use in the QSR establishments.

    What may surprise some is that I suspect revenue from the gate and any other streams within China will likely never be repatriated and any profit comes of it will likely not be realized in the USA for decades to come (if ever.)

    As a guy who did business in China for the last five years, (and studied it my whole life) I have learned this one maxim: “When you do business in China, you are doing business FOR China.” That’s not Disney’s fault. They know exactly what they are doing- and they know it’s going to be hard.

    Many years ago, there were probably plenty of misty-eyed leaders attending historical banquets when these deals began to be discussed. I like to imagine the trades that had to be made to get this to work: (The following hypothetical examines only ONE of the countless threads that could be pulled on this tapestry…)

    China: Hey, Disney, if you invest over $3B as a minority shareholder in a face-giving stimulus project bound to excite everyone about Pudong, give local, municipal and even national government figures (mostly from Shanghai) foreign legitimacy, we’ll exempt you from the nation-wide limit of 20 foreign release spots/year that we offer foreign studios; and we will also lift the restrictions on foreign TV program pertaining to materials produced off-shore.

    (Off stage, Disney checks with lawyers and makes sure they aren’t violating FCPA)

    Disney: Hey, that’s cool. You mean we can release all our Marvel movies in China’s fastest growing theatre and licensing market; we can get access to your internet media platforms as well as television; all the while using the Park to promote not only our movies, but to establish a continued IP foothold in China for decades to come?

    China: Well, sort of. We can’t be transparent to you about the box office revenue; and we’ll probably find a way to obfuscate the gate revenue and locally extort you while we hold quality, safety and security hostage… but, Yes- in a nutshell, that’s a deal.

    (Off stage, Disney checks with lawyers again to make sure they aren’t violating FCPA)

    Disney: OK, so we probably won’t make a ton on the park and we can’t re-patriate the funds very easily; but does this also mean we can look awesome to international investors and board members; while we maintain a fixed presence in China that mandates our publicly held yet state-owned enterprise Shendi protects us since their face is on the line too?

    China: Well, sort of. We will have a special arrangement of blaming Disney publicly for anything that goes wrong but protecting you privately, kind of like we have with other foreign companies.

    (Off stage, Disney hires the bravest soul alive to act as the Disney face for Shanghai Disney Resort. He and his family begin going to church on a regular basis and giving to charity out of the stark fear that such an assignment would bring.)

    Disney: Oh, okay. Cool. Let’s do it.

    (11 years later: Shanghai Disney Resort opens)

    And in classic Walt Disney style, the Park will stand as a model to reinforce the work of the Studios- just as it was intended to be from 1955 – only now it will work that way in spades in China. It won’t work in a way most non-international business people recognize, but it will work.

    All of that said, a budget over-run in Shanghai likely has nothing (if ANYTHING at all) to do with cuts made in other constituent LOBs (to include other parks.) I don’t really care about the so-called reliability of the source. The report demonstrates an egregious ignorance of how things work in this big world. At any rate as to Shanghai — I hope it’s a wildly successful opening. Long after it’s over, we’ll actually never know if it was. But our brothers and sisters in China need access to the beauty Disney offers.

    As to management practices domestically, I’m not at all qualified to say. I admit that I have noticed a revenue-or-die mentality that has measurably reduced the quality in the parks — uncleanliness, over-burdened cast attitudes, and several legacy-offending and counterintuitive decisions seem to be the rule not the exception. But I have heard of this ebb and flow within the parks before. I’m not worried.

    Sadly, I’ve heard young CMs suggest quite often, “If Disney doesn’t care about me or even this place, neither do I.” That actually stunned me until I heard it for about the 30th time. And to place that concern in relief, I’ve heard no shortage of guests (those who speak English anyway) wonder out loud, ‘What happened to this place?!” In spite of that- still not worried.

    Hopefully George can turn this around, but he’s clearly up against some very significant obstacles — NONE of which includes Shanghai. There is something else kind of cancerous going on. Don’t know what it is. But it’s not pretty. Hope it sorts itself out soon. I think it will.

    To blame macro-strategic decisions made 11 years ago on current operational issues is an indication of intellectual dishonesty. We can say what we want about “corporate” leadership, but these are smart and good people. They do have the best interests of the company in mind; but I also believe they love their people. I believe they may make mistakes but I don’t believe they are dishonest.