Layoffs prove that Disney can be a truly cut-throat business

THE massacre at the Mouse House was plotted at the “happiest place in earth”, Disney’s venerable theme park in Orlando, Florida.

This is where Dick Cook, the normally cheery chairman of Walt Disney Studios, warned colleagues at the company’s executive retreat that the axe was about to fall on 650 jobs, possibly the biggest purge in Hollywood history.


After a series of cinematic disasters, including the story of an even bloodier massacre at The Alamo, it was time for Disney to get out of “adult” entertainment and back to its family-orientated roots, he proclaimed.

This week 20% of the worldwide workforce will learn they are on the “black list” Cook has been pondering since he became chairman in 2002.

Some already know their fate: last week Nina Jacobson, Cook’s deputy at Buena Vista, one of Disney’s half dozen film divisions, was told by mobile phone she had been sacked as she stood by the hospital bed where her girlfriend was giving birth to their third child.

The 40-year-old Disney producer was already having a bad week. She had been savaged in a tell-all book authorised by M Night Shyamalan, a director who has made a fortune scaring people. Shyamalan, responsible for The Sixth Sense, complained Jacobson had been unkind about his latest film, Lady In the Water, forcing him to take it to Warner Bros.

If critics are to be trusted and the film flops on opening this weekend, Cook may owe the departed executive a $140m (£76m) debt of gratitude.

Cook started at Disney in 1970 driving coal-powered locomotives at its Californian theme park and moved on to producing mildly risqué entertainments such as Pretty Woman and Good Morning Vietnam. But he now feels that its adult arm, Touchstone, has run out of steam.

His decision to “ramp up the family values” not only reflects Republican America but also two increasingly powerful outsiders: Steve Jobs, whose Pixar hits killed off traditional Disney animation before he sold his studio to Disney, and Philip Anschutz, a fundamentalist billionaire (and John Prescott’s cowboy pal) who brought the Narnia franchise to the studio.

There is another hidden hand in Hollywood: Once upon a time, perhaps in 1919 when Charlie Chaplin and Mary Pickford founded their own studio and called it United Artists, the town was run by creative people who were as much in love with movies as the fans. Now every studio is part of a larger global conglomerate whose fortunes are driven by Wall Street. (Not that it was that impressed by last week’s announcement of job cuts; Disney’s shares barely moved.)

This trend gathered momentum last year when Steven Spielberg, the spiritual heir to Chaplin, sold his Dream Works studio to Viacom’s Paramount for $1.6 billion, admitting he could not make a financial case for standing alone. Jobs are still disappearing at Paramount.

Metro-Goldwyn-Mayer, one of Hollywood’s oldest studios, which at its height used to release one film a week, was also snapped up last year, by Sir Howard Stringer at Sony. Since then 1,350 jobs have gone at MGM. In addition 400 jobs have been axed at Warner Bros in the continuing fall-out from the AOL merger.

There are those who rub their hands at the plight of Hollywood. Amir Malin, who has run several independent film companies, said “a business that should be highly profitable has become a byword for waste and extravagance”.

Others say it has always been thus.

Disney says it is now in effect dumping Touchstone, terminating future projects such the aptly-named Déjà Vu and Dead in The Water, to focus on an annual dozen “good” family films, inspired perhaps by the success of its Pirates of the Caribbean franchise.

The trouble is, say critics, nobody knows what a good film is — only that one can pay for all the flops, and reducing the numbers merely cuts the odds of hitting the jackpot.

This, and the fact that nobody truly understands Hollywood’s voodoo economics and book-keeping practices, may help explain Wall Street’s cool reception to Cook’s cost-cutting.

Anyway, nod the old Hollywood hands, it’s all cyclical and, in five years Disney will be paying over the odds to get back into the grown-ups’ club. Jacobson might even be running the company. That is show business.


Leave a Reply