Disney Parks and Resorts Division Restructures for Cost Savings

The change that we all knew was coming has been announced. Once Disney announced that they would be offering severance packages to hundreds of Parks and Resorts Division Executives, I knew the next shoe to drop would be a further consolidation of the east and west coast management structures.

Frankly, Disney has been trending this way a long time. Disneyland lifers have been holding out against the move fearing they would lose some of what makes Walt Disney’s original park special, but the economic crisis has given Jay Rasulo the ammunition to install the changes.

This new action will result in some job loss even below the executive level that was offered severance packages. Unfortunately the details were not announced so we don’t know how deep job loss will go.

Two areas we know are going to get hit hard are: Imagineering and Theme Park Operations. At Walt Disney Imagineering everyone will be consolidated into a single group that handles design for all parks.

The operating infrastructure at Walt Disney World and the Disneyland Resort will also be merged to create a single domestic organization and “back-of-house” operation.

Disney execs were putting the final touches on these changes last week while in town for the American Idol Experience launch.

The changes announced today are effective immediately.

Disney’s Press Release on the reorganization is below the cut and don’t miss Jason Garcia’s coverage at the Orlando Sentinel.:

Walt Disney Parks and Resorts Reorganizes to Create a “One-Disney” Experience

Restructuring will Consolidate U.S. Operations, Simplify and Streamline Product Delivery

BURBANK, Calif. – February 18, 2009 – Jay Rasulo, chairman of Walt Disney Parks and Resorts, today announced organization changes to deliver a “one-Disney” experience by simplifying the Parks and Resorts operating structure, streamlining decision-making and eliminating redundancy.

“We know that our Guests want a ‘one-Disney’ experience and we must organize around that expectation,” said Rasulo. “The long-term success of Parks and Resorts depends upon our ability to adapt and innovate and respond to Guest preferences. These changes are essential to maintaining our leadership position in family tourism and reflect today’s economic realities.”

Today’s announcement accelerates the evolution of the Parks and Resorts management structure by creating seamless behind-the-scenes operations across domestic Parks and Resorts, while preserving the uniqueness, character and culture of our individual destinations.

In a memo to employees Rasulo explained: “In 2005, we announced a new Walt Disney Parks and Resorts operating structure. We transformed our organization to match consumers’ expectations: ‘one-Disney,’ regardless of how or where they experience our products. We put in place a new leadership team, integrated key business functions and implemented a consistent set of best practices. This allowed us to more rapidly and efficiently roll out new creative projects and better anticipate changes in travel trends.

“We’ve already seen innumerable benefits. Prime examples of our successes are the establishment of many maintenance and safety practices, holiday castle lighting that began in Paris and expanded into our other theme parks, the speed with which we integrated the High School Musical shows into our parks around the world, and the simultaneous openings of Toy Story Mania at Disney’s Hollywood Studios and Disney’s California Adventure.

“We have made significant progress. However, the long-term success of Parks and Resorts depends upon our ability to continue to adapt and innovate, to respond to ever-changing Guest preferences, and to implement an organization and cost structure that meet today’s economic realities. We must accelerate the evolution of our business and further refine our structure to work in a more integrated and effective manner.

“We know that our Guests want a ‘one-Disney’ experience and we must organize around that expectation. Our new structure will enhance our ability to Identify and Develop the next great Disney experience, Create and Build Disney destinations that incorporate our rich storytelling heritage and Operate them in a way that delivers a unique, memorable experience that transcends geography. Economic realities require that we do this in a simplified and streamlined manner that eliminates redundancies.”
Organization Changes Announced Today

A new Global Business Development team led by Executive Vice President Nick Franklin will combine the existing development functions of business and real estate development. The team will be responsible for driving growth by working with existing businesses on their development strategies, while also exploring new business opportunities around the globe.

Walt Disney Imagineering under the leadership of Bruce Vaughn, EVP, Chief Creative Executive and Craig Russell, EVP, Chief Design and Project Delivery Executive, will be reorganized into a single practice merging resort development with attractions and entertainment development to bring the creativity of Disney storytelling to the design and delivery of products at all Disney destinations.

Al Weiss, President, Worldwide Operations, will lead the work of merging the operating infrastructure at Walt Disney World and the Disneyland Resort to create a single domestic organization and “back-of-house” operation.

In the coming weeks, other functions will review their organizations and make appropriate changes.

In his memo Rasulo acknowledged the challenges inherent in a large-scale reorganization: “Organization changes require difficult decisions, including the elimination of some roles. These decisions were not made lightly and we know this will be a challenging transition. The people affected are our friends and colleagues, and they have made valuable contributions.”

The changes announced today are effective immediately.