The cuts are the latest evidence of belt-tightening by some of the world’s largest companies at the start of an economic slowdown in the US.
Ken Green, a company spokesman, said that all business areas of the company would be affected, from employees in Disneyland Paris to those at the company’s flagship ABC news channel in the US. Disney has already cut hundreds of internet-related jobs over the past few months in an attempt to stop its online operations haemorrhaging money.
In a letter to the company’s 120 000 employees yesterday, Michael Eisner, the chief executive, said the media and entertainment giant needed to cut costs to cope with the downturn in corporate advertising and consumer spending.
“We need to face up to the increasingly pressing challenges of the softening economic environment,” he said. “We must also uphold investors’ confidence in our future while maintaining our core commitment to quality and creativity.”
The California-based company expects to save between $350m and $400m a year from the redundancy programme. As many as possible of the employees – mouseketeers, as they are known – would be offered voluntary redundancy, the company said. The costs of the redundancy package, which will include severance pay, benefits and outplacement services, are expected to add up to $250m.
Last month the company warned that earnings would increase by single-digit percentage points this year.
In February, Disney opened a 22-hectare, $1.4bn theme park in Anaheim called Disney’s California Adventure. Wall Street analysts have been sceptical about the hope that extra revenue from the new park would make up for the downturn in consumer spending and advertising revenues.
The announcement last night came after a rally in the US stock market. Figures released yesterday suggested that US consumer confidence, which has followed share prices earthwards over the past few months, finally started to improve in March.