Disney recently announced the termination of employment for 28,000 cast members. It is a bitter pill for both those being let go and their cast member first focused leader, Josh D’Amaro. It seems like eons ago that Josh took over as head of Walt Disney World—later promoted to chairman of Disney Parks—announced a major project to upgrade cast member backstage facilities. Now those efforts are likely abandoned, and Josh is apologizing in person to employees.

The layoffs, severe as they are, require some perspective and can help the rest of us make our own intelligent decisions.

This is not the first time Disney has laid off personnel. It has happened several times before, including those I survived during Desert Shield (1994) and after the 9/11, 2001 terror attacks. I did not survive the one that occurred during the 2008-09 economic downturn. My position, along with many others, was eliminated. It was, frankly, a hard time and it still sometimes hurts. 

That hurt is caused by a specific Disney attitude. For most of Disney’s workforce, the Mouse is not a job, it’s a calling. People can find another job. But where else can you make magic? Also, Disney has a unique internal culture, similar to a fraternity or sorority. When you’re in, you’re all in. When you are out, you’re all out. It’s not that cast members want to avoid those let go. Rather, you are no longer one of them.

There also is an issue of the perks Disney cast members get, especially the main gate pass that allows you to enter the park almost at will. If over 55, you can retire and keep that pass. Many, depending on their hiring contract, also keep health care benefits. Those let go in their 30s and 40s, lose those perks.

But Disney had no choice. They had extended themselves to protect employees far beyond what was required. When COVID hit, they continued paying salaries until the expanded unemployment benefits started. Even then, they did not terminate; they furloughed and continued those furloughed employees health care benefits. Additionally, leaders gave back portions of their pay with CEO Bob Iger forgoing his entire salary.

Even with these givebacks, the loss of income was (and is) severe and, for the company, life threatening. Imagine Disney’s income centers as a three legged stool of live experiences, movies and online content. Both live entertainment (theme parks, cruise line, retail) and movies (Disney, Marvel, Star Wars, 21 Century) are generating little revenue and online (Disney+) is newly launched and barely profitable. Disney's loses have been estimated to be 20-30 million a day and 5-10 billion for all of 2020.

With Disney hemorrhaging money, the company had to take drastic steps. Worse, Disney took out lines of credit for 13 billion to cover its costs. That money is a duel edged sword; it keeps the company afloat but is also an attractive vehicle for funding a corporate takeover. Perhaps the most important goal of the Walt Disney Company, and one that goes all the way back to Walt, and that both CEOs Michael Eisner and Bob Iger aggressively perused, is keeping Walt’s company independent.

So here we are. It’s terrible news for the laid off employees but given how dedicated employees like those snapped above are to Walt Disney and all he stood for, none would likely want to see Disney fail.

What can we all learn from this? A Disney inspired approach that places its team members first and does everything it can for them as long as it can and then is forced to pivot to save itself, is in less danger of negative public repercussions than a company who callously fires personnel. A people first approach does, after all, include a firm focus on maintaining the strength and health of the company. Although the effort to protect its employees ultimately failed, few will say that Disney did not do all it could. It is the right thing to do, not just for Disney, but for anyone who wants to maintain their business and its viability with customers over the long hall. If Disney survives, it will be in a better position to thrive because of the actions it has taken. Can you say that about your business and your relationships with people?