OPINION: Stuart Elliott in America

Not Mickey Mouse too!

That was the reaction on Madison Avenue to news last week that the Mouse

House, aka the Walt Disney Company, would lay off 4,000 'cast members',

as its employees are so cutely called, or about 3 per cent of its total

workforce of 120,000. Disney had previously announced a layoff of more

than 25 per cent of the staff of its Internet Group, which totals 2,000

employees, but the latest announcement made much more of an impact.

After all, everyone knows that cyberspace is a basket case - hopeless

but not serious, to quote a line from the Billy Wilder comedy One, Two,


But now the layoffs are coming at the centre of the Disney empire, which

includes the entertainment and media operations ranging from the ABC and

ESPN television networks to the Disney and Touchstone movie studios to

the theme parks on three continents.

Disney could become the poster child for the American economic slowdown,

symbolising the dislocations that are suddenly and unexpectedly

transforming the advertising, marketing and media industries.

Mere months ago, agencies couldn't find enough people to fill the empty

chairs in virtually every office; TV and radio networks were cramming

more commercial minutes into each hour to capitalise on robust demand;

outdoor advertising companies were compiling waiting lists of marketers

wanting to buy posters in key locations in hot markets such as New York;

and magazines and newspapers were turning away would-be advertisers

because of constraints on press capacity.

What a difference a Bush makes.

OK, so maybe the abrupt and disruptive changes aren't W's fault. But

certainly his accidental presidency is beginning with a souring economy

and a skittish stock market, which are unnerving the consumers whose

confidence is practically mandatory in order to keep the downturn from

turning into one of those recessions that cost his father a second term

in 1992.

Agencies are responding with layoffs of their own that are coming much

more quickly in the economic cycle than during the last bout of bad


To be sure, many of the dismissals are concentrated where they might be

expected, such as among online agencies and shops in San Francisco, a

market hard hit by the dotcom debacle.

But in several instances, many employees who are being let go are

working - or rather, were working - at agencies that aren't faring

anywhere near as poorly. For instance, Ogilvy & Mather Worldwide is

laying off an estimated 5 per cent of its staff, even though its largest

client, IBM, plans to increase its ad budget this year by 17 per cent,

or dollars 110 million, after indicating that its ad spending for 2001

would be even with 2000.

Then there was the unusual, to say the least, decision by BBDO Worldwide

to reduce staff after one of the agency's biggest triumphs. After

beating FCB Worldwide to the consolidated account of the Chrysler Group

division of DaimlerChrysler, BBDO said it would let go an unspecified

number of staff.


The dismissals were deemed necessary to help achieve the cost savings

BBDO had promised DaimlerChrysler when it won the business. Though some

cuts are to be achieved through attrition, that's unlikely to serve as

solace for those who celebrated the victory only to discover it cost

them their jobs.

Now who's Goofy?

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