Disney to Cut 4,000 Jobs

Walt Disney (DIS Quote) said Tuesday it plans to cut 4,000 jobs, about 3.3% of its worldwide workforce, because of a softening economy, but said its 2001 financial outlook remains intact.

Disney said it hopes to achieve the majority of job cuts through a voluntary incentive program that will run through mid-June in which the company will offer employees a special severance package for stepping forward. Disney, which employs an estimated 120,000 people, will complete all layoffs by the end of July and says the move should save $350 million to $400 million annually.

In a letter to employees, the company said the reduction will affect all parts of its business, including corporate staff.

Disney expects to incur a one-time charge of less than $250 million to be taken in its third and fourth quarters.

Full-year earnings projections, excluding one-time charges, remain unchanged, the company said. Disney anticipates earnings growth in the single-digit range for 2001. For fiscal 2000, Disney earned 73 cents a share. Fifteen analysts surveyed by Thomson Financial/First Call expect the company to earn 77 cents a share in 2001.

Shares of Disney closed at $29.20 on the New York Stock Exchange this afternoon.