Tag Archives: Hiring and recruitment

Business

Disney plans job cuts and hiring freeze, CEO Bob Chapek says in memo

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Disney plans to institute a targeted hiring freeze as well as some job cuts, according to an internal memo sent to executives.

“We are limiting headcount additions through a targeted hiring freeze,” CEO Bob Chapek said in a memo to division leads sent Friday and obtained by CNBC. “Hiring for the small subset of the most critical, business-driving positions will continue, but all other roles are on hold. Your segment leaders and HR teams have more specific details on how this will apply to your teams.”

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He added: “As we work through this evaluation process, we will look at every avenue of operations and labor to find savings, and we do anticipate some staff reductions as part of this review.” Disney has approximately 190,000 employees.

Chapek also told executives business travel should be limited to essential trips only. Meetings should be conducted virtually as much as possible, he wrote in the memo.

Disney is also establishing “a cost structure taskforce” to be made up of Chief Financial Officer Christine McCarthy, General Counsel Horacio Gutierrez and Chapek.

“I am fully aware this will be a difficult process for many of you and your teams,” Chapek wrote. “We are going to have to make tough and uncomfortable decisions. But that is just what leadership requires, and I thank you in advance for stepping up during this important time.”

The moves come after Disney reported disappointing quarterly results. Shares of the company fell sharply Wednesday, hitting a new 52-week low, before rebounding later in the week.

McCarthy said during Disney’s earnings call Tuesday that the company was looking for ways to trim costs.

“We are actively evaluating our cost base currently, and we’re looking for meaningful efficiencies,” she said. “Some of those are going to provide some near-term savings, and others are going to drive longer-term structural benefits.”

Disney’s streaming services lost $1.47 billion last quarter, more than double the unit’s loss from a year prior. McCarthy said losses will improve in 2023, and Chapek has promised streaming will become profitable by the end of 2024.

Other large media and entertainment companies, including Warner Bros. Discovery and Netflix, have cut jobs this year as valuations have slumped. Disney hasn’t announced any plans to eliminate jobs.

The full memo can be read here:

Disney Leaders-

As we begin fiscal 2023, I want to communicate with you directly about the cost management efforts Christine McCarthy and I referenced on this week’s earnings call. These efforts will help us to both achieve the important goal of reaching profitability for Disney+ in fiscal 2024 and make us a more efficient and nimble company overall. This work is occurring against a backdrop of economic uncertainty that all companies and our industry are contending with.

While certain macroeconomic factors are out of our control, meeting these goals requires all of us to continue doing our part to manage the things we can control—most notably, our costs. You all will have critical roles to play in this effort, and as senior leaders, I know you will get it done.

To be clear, I am confident in our ability to reach the targets we have set, and in this management team to get us there.

To help guide us on this journey, I have established a cost structure taskforce of executive officers: our CFO, Christine McCarthy and General Counsel, Horacio Gutierrez. Along with me, this team will make the critical big picture decisions necessary to achieve our objectives.

We are not starting this work from scratch and have already set several next steps—which I wanted you to hear about directly from me.

First, we have undertaken a rigorous review of the company’s content and marketing spending working with our content leaders and their teams. While we will not sacrifice quality or the strength of our unrivaled synergy machine, we must ensure our investments are both efficient and come with tangible benefits to both audiences and the company.

Second, we are limiting headcount additions through a targeted hiring freeze. Hiring for the small subset of the most critical, business-driving positions will continue, but all other roles are on hold. Your segment leaders and HR teams have more specific details on how this will apply to your teams.

Third, we are reviewing our SG&A costs and have determined that there is room for improved efficiency—as well as an opportunity to transform the organization to be more nimble. The taskforce will drive this work in partnership with segment teams to achieve both savings and organizational enhancements. As we work through this evaluation process, we will look at every avenue of operations and labor to find savings, and we do anticipate some staff reductions as part of this review. In the immediate term, business travel should now be limited to essential trips only. In-person work sessions or offsites requiring travel will need advance approval and review from a member of your executive team (i.e., direct report of the segment chairman or corporate executive officer). As much as possible, these meetings should be conducted virtually. Attendance at conferences and other external events will also be restricted and require approvals from a member of your executive team.

Our transformation is designed to ensure we thrive not just today, but well into the future—and you will hear more from our taskforce in the weeks and months ahead.

I am fully aware this will be a difficult process for many of you and your teams. We are going to have to make tough and uncomfortable decisions. But that is just what leadership requires, and I thank you in advance for stepping up during this important time. Our company has weathered many challenges during our 100-year history, and I have no doubt we will achieve our goals and create a more nimble company better suited to the environment of tomorrow.

Thank you again for your leadership.

-Bob

WATCH: Disney had to get into streaming, but Meta just did too much hiring

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Business

Wage inflation, used car prices could jump higher: Jim Bianco

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Washington’s efforts to curb inflation will fall short particularly this year, according to market forecaster Jim Bianco.

And, he believes this week’s key inflation data will help prove it.

“I don’t see anything that will reduce the inflation rate. There are some things that might reduce prescription drug prices and maybe a couple of other things,” the Bianco Research president told CNBC’s “Fast Money” on Monday. “But will that bring down CPI? Will that bring down core CPI to a point where we can actually start pricing that in? No, I don’t think so.”

The government releases its Consumer Price Index [CPI], which tracks prices people pay for goods and services, for July this Wednesday. Dow Jones expects the number to come in at 8.7%, down 0.4% from June. The headline number includes energy and food, unlike Core CPI. On Thursday, the government releases its Producer Price Index [PPI].

Bianco contends peak inflation may still be ahead.

“Inflation is persistent. Is it going to stay 9.1%? Probably not. But it might settle down into a 4%, 5% or 6% range,” he said. “What does that mean? We’re going to need a 5% or 6% funds rate, if that’s where inflation is going to settle.”

There’s no near-term solution, according to Bianco. As long as wage numbers come in hot, he warns inflation will continue to grip the economy.

“Wage inflation, from what we saw in the report on Friday, is at 5.2% [year-to-year], and it’s looking pretty sticky there,” Bianco said. “If we have 5% wages, you can pay 5% inflation. So, it’s not going to go much below wages. We need to get wages down to 2% in order to get inflation down to 2% and wages aren’t moving right now.”

‘If you’re not going to pay extra for that car, then you’re going to have to walk’

Bianco lists used car prices as a major example of relentless inflation. He believes high sticker prices won’t meaningfully budge for months due to demand, supply chain issues and chip shortages forcing automakers to reduce features in new cars.

“If you’re not going to pay extra for that car, then you’re going to have to walk because that’s the only way you’re going to get a ride right now,” said Bianco.

According to the CarGurus index, the average price for a used car is $30,886, up 0.2% over the past 90 days and 10.5% year-over-year.

“Used car prices in the last 18 months have actually outperformed cryptocurrencies,” he added .”It’s been one of the best investments that people can have.”

Bianco expects the Inflation Reduction Act, which was passed by the Senate this weekend, would have a negligible impact if it’s enacted.

“A lot of this stuff doesn’t kick in for another couple of more years,” Bianco said. “In a world where we want to know what the Fed is going to do in September and when inflation is going to peak, those are ’22, ’23 stories. Those are going to continue to dominate the markets.”

The House is expected to vote Friday on the legislation.

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Business

Target trims holiday hiring goals

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Target will hire fewer seasonal workers this year  and will instead offer more hours to current employees

September 23, 2021, 6:21 PM

2 min read

NEW YORK — Target will hire fewer seasonal workers this year, instead offering more hours and flexibility to the employees it does have.

About 100,000 seasonal workers will be hired nationwide, the company said Thursday, about 30,000 less than last year. Many of those workers will be offered jobs beyond the holiday season. A total of 5 million additional hours of work will be offered during the holiday season to non-holiday hires, potentially adding $75 million more into their paychecks.

Already, hourly employees at the Minneapolis retailer are working nearly 15% more than last year but according to Target, they are requesting more hours.

Overall, employers have struggled all year to find staff. They’ve increased hourly pay, announced signing bonuses and cast aside previous minimum standards like a high school diploma. They’re are also making applications more convenient. UPS this month said it will hire more than 100,000 people for the holiday rush and for many, a job offer from UPS will come within 30 minutes of applying.

In its own bid to attract more workers last month, Target said that it would spend $200 million over the next four years to offer its workers free undergraduate and associate degree programs as well as certificates in business-oriented majors at select institutions.

Target does not appear to be alone in the decision to lower its hiring goals. Global recruiting firm Challenger, Gray & Christmas predicts retailers will add 700,000 workers during this year’s holiday season, over 36,000 fewer than in 2020. Hiring before the pandemic was particularly robust, however, and hires this year outpace those of 2019.

Retailers are focused more on hiring people who will stay rather than temporary, seasonal workers, said Andrew Challenger, senior vice president of Challenger, Gray & Christmas.

And employers are trying to better accommodate the workers they can find.

Target, based in Minneapolis, is allowing a lot more potential flexibility through a new mobile scheduling app that allows workers to choose shifts or swap with other employees.

More workers are serving in roles that allow customers to pick up goods ordered online at the store, or to pick them up curbside. The number of positions dedicated to getting customers what they want, where they want it, has tripled over the past two years, according to Target.

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Business

Walmart to hire 20,000 workers to aid supply chain

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A shopper loads items into a vehicle outside a Walmart store in San Leandro, California, U.S., on Thursday, May 13, 2021.

David Paul Morris | Bloomberg | Getty Images

Walmart said Wednesday it plans to hire 20,000 employees to help keep merchandise moving ahead of the anticipated holiday shopping rush.

The big-box retailer, which is already the nation’s largest employer, said the roles will be in supply chain. The jobs will be a mix of full-time and part-time, but will be permanent positions. They will range from order fillers to freight handlers at the company’s more than 250 distribution centers, fulfillment centers and transportation offices.

The average wage for a supply chain associate is $20.37 per hour, Walmart said in the corporate blog post. The company said it will hold special hiring events Sept. 8 and 9.

Walmart is staffing up as companies cope with fierce competition for workers and Covid-19 outbreaks that have halted manufacturing, slowed shipping and led to congested ports across the globe. These challenges have translated into delays, out-of-stock items and higher prices across the industry. They have also raised questions about whether retailers will be prepared for the peak season of gift-giving — particularly as more of that shopping takes place online.

Walmart has not yet announced plans for holiday hiring. Last year, the retailer said it would hire 20,000 seasonal associates, the first time in five years it had announced significant holiday hiring.

The company has also ramped up supply chain investments, such as adding high-tech, automated systems to select stores that help pick and pack online grocery orders.

Walmart said in August it was seeing strong demand for back-to-school supplies, luggage, apparel and more, as consumers flocked back to stores. Chief financial officer Brett Biggs said on a second-quarter earnings call that the company has increased lead times for orders and chartered its own dedicated vessels to speed up imports. Even so, he said, “out-of-stocks in certain general merchandise categories are running above normal, given strong sales and supply constraints.”

As Walmart competes with other employers for hourly workers, it has sought to sweeten the deal. It recently began paying special bonuses to warehouse workers and covering 100% of college tuition and textbook costs for employees.

Other retailers have announced similar perks and policy changes. Among them, Target rolled out its own debt-free college program. CVS Health and Walgreens Boots Alliance said they would boost their starting wages to $15 an hour, and CVS said it would drop education requirements for entry-level jobs.

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