As reported by CNBC, Disney began its planned layoffs of 7,000 employees this week in an effort to reduce corporate spending and boost free cash flow.
This was according to a memo sent by CEO Bob Iger, who said last month the company planned to cut $5.5 billion in costs, including $3 billion in content spend.
“This week, we begin notifying employees whose positions are impacted by the company’s workforce reductions,” Iger wrote in the memo, which was obtained by CNBC. “Leaders will be communicating the news directly to the first group of impacted employees over the next four days. A second, larger round of notifications will happen in April with several thousand more staff reductions, and we expect to commence the final round of notifications before the beginning of the summer to reach our 7,000-job target.”
The layoffs were initially announced in February and the job cuts are expected to be cross-company, hitting Disney’s media and distribution division, parks and resorts, and ESPN.
The Wall Street Journal reported on Wednesday that Disney’s entire metaverse division would be eliminated as part of the cuts. The team has roughly 50 members and was tasked with finding ways to tell interactive stories in new technological formats using Disney’s extensive library of intellectual property.
European Union Approves Pay Transparency Directive
As reported by Bloomberg, the European Union on Thursday approved a pay transparency directive that includes a series of reforms for employers across its 27 member-nations aimed at closing the gender pay gap.
The legislation borrows ideas already in place in a number of cities and countries around the world. Similar to measures recently rolled out in New York City and other parts of the U.S., organizations will have to provide information about the pay level or range when advertising open positions.
Companies will also have to publish the difference between what men and women are paid every year, something that was established in the UK a few years ago that Japan and Australia have also adopted, Bloomberg notes. Employers won’t be allowed to ask prospective workers about their pay history either.
In addition, national governments will have to put penalties, such as fines, in place for companies that report gender pay gaps of at least 5% — if they can’t give a good reason for the disparities.
The directive is meant to expedite the EU’s mission to close the gender pay gap. Under the status quo, it’s projected to take 63 years to accomplish equal pay in the EU, as women made an average of 12.7% less in hourly earnings than men in 2021.
McKinsey and Co. Slashing 1,400 Roles
As reported by Bloomberg, consulting giant McKinsey and Co. is embarking on a rare round of major job cuts, with plans to eliminate about 1,400 roles.
The company has seen rapid growth in the past decade, but is restructuring how it organizes its support teams, including workforce reductions or moving people into other roles, Bloomberg reported.
The total cuts will amount to about 3% of headcount that has ballooned to almost 47,000 from 28,000 just five years ago and 17,000 in 2012.
“The painful result of this shift is that we will have to say goodbye to some of our firm functions colleagues, while helping others move into new roles that better align to our firm’s strategy and priorities,” Bob Sternfels, global managing partner, wrote in a note to staff. “Starting now, where local regulations allow, we will begin to notify colleagues who will depart our firm or be asked to change roles.”
Unlike some of the major financial firms it works with, McKinsey rarely carries out job cuts in its own ranks, Bloomberg notes. Even underperforming employees in client-facing roles tend to depart after being “counseled to leave” — a phrase that indicates the company doesn’t want them on client projects and recommends they try to find a different employer.
The company, where it can, is “implementing reductions through attrition or voluntary departures,” Sternfels wrote.
New York Advances Bill Requiring Employers to Report Worker Race
As reported by HR Dive, a New York bill that would require certain employers to report employee race, gender and ethnicity data passed the state senate March 20.
Limited liability companies required to file an EEO-1 report with the U.S. Equal Employment Opportunity Commission would have to submit substantially similar information to the New York secretary of state, who would then make the data publicly available on the secretary’s official website.
The bill, which is now with the state assembly for consideration, explained the justification for why it would seek to make the information public at the state level.
“Companies often tout their commitment to diversity, equity & inclusion (DEI), environmental goals, or other causes, but there is little data available to the public the verity [of] these claims,” the provision stated. In addition, “current and prospective employees have an interest in evaluating the DEI practices of employers, but do not have access to the company-wide employee demographic data needed to make such an assessment,” it explained.
“Having this data publicly available creates an environment where we can hold our companies accountable,” the provision points out. Making the information public would also “provide consumers and employees with the data to make good decisions” and “provide investors with the information to deploy capital in a manner in keeping with their values.”
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