Disney may cut more jobs
April 24, 2001: 10:11 a.m. ET

Animation unit reportedly targeted for further staff and salary reductions
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NEW YORK (CNNfn) - Walt Disney Co. is planning wide-ranging cuts in jobs and salaries at its feature animation unit, according to a newspaper report Tuesday.

Disney executives have been discussing falling profits and rising costs at their Burbank, Calif., animation unit for the past two weeks, according to a report in the Los Angeles Times.

As a result of these discussions, the report said, Disney may eliminate "dozens" of jobs and cut salaries by 30 to 50 percent.

Disney President Robert Iger told the Times Monday that all Disney units have been challenged to operate more efficiently and that staff and compensation levels are being reviewed along with marketing and production costs.

Iger said the competition that drove up salaries for animators after the success in 1994 of "The Lion King" has dried up, according to the report.

"We all reaped the benefits, and now we have to make cuts," one animator told the paper.

Tom Sito, president of the Motion Picture Screen Cartoonists Local 839 and a former Disney animator, told the Times that as many as 300 jobs could be cut at the Burbank facility alone. It is estimated that Disney has about 2,000 animation employees at facilities in Burbank, Orlando, Fla., and Paris.

Disney announced in late March it was cutting 4,000 jobs -- about 3 percent of its total workforce -- in response to a slowing economy.

The company lately has favored cheaper animated features with the potential for bigger profits, such as "The Tigger Movie," which cost $6.5 million to make but grossed $45.5 million domestically and $28.3 million internationally and generated $78.8 million in video revenue.

One source told the Times that Disney (DIS: down $0.04 to $29.99, Research, Estimates), instead of taking costs out of animators' salaries, should be studying "why these films aren't loved by audiences anymore. What we have to do is make great films -- that always pays off in the end."       graphic

- from staff and wire reports