NO LOVE AT DISNEY-FOX AFTER THE ACQUISITION

Take two multi-billion dollar entertainment powerhouses and integrate them and the eventual outcome is a projected loss of between 5,000 and 10,000 duplicative positions and non-critical personnel. For those not living in New York or Los Angeles, Disney has purchased a treasure trove of 21st Century Fox assets for approximately $53+ Billion. In spite of President Trump’s spokesperson, Sarah Huckabee Sanders, who said that this deal “could be a great thing for jobs,” it is suggested that an estimated $2-$3 billion in “synergies” is a code-word for “cost-saving redundancies.” Perusing the annual reports reveals that Disney has approximately 195,000 employees while Fox’s headcount is approximately 22,000. 

Fox’s Rupert Murdoch has told employees, ““We are deeply committed to finding opportunities for our people as well as ensuring that anyone impacted is well taken care of.” Since this deal involves broadcast entities requiring government approvals, the timeline centers around regulatory approval by 2019, with the full effects of integration by 2021. 

The deal makes sense. For Murdoch, the aging rather conservative mogul who gambles on people and project, can return to his first love, newspapers and the Fox broadcasting (News, Sports, Business) empire, and leave the film and television content creation to others. Disney, as a content creator and distributor, needs a platform to compete with the likes of Netflix and Amazon who have solid platforms and are beginning to create and distribute theatrical-quality content. To this end, Disney will be poised to grab 60% ownership (and control) of the streaming-video Hulu platform (currently equally owned by Fox, Disney, and Comcast, all of whom have 30% stakes; with Time Warner owning the remaining 10%.) 

This is one of those moments when the handwriting is on the wall and employees have time to feather their own nests if they believe that they are caught in the duplicative intersection between the two companies. 
 

NO LOVE: A SIX PACK OF MAJOR RESTRUCTURING LAYOFFS

NO LOVE AT SOLAR CITY (ACQUISITION/MERGER)

SolarCity has notified the State of California’s Employment Development Department that it will be laying off 141 people at its Roseville, California as the company continues to integrate its operations into parent corporation Tesla, Inc. The jobs affected include middle management positions like inside sales directors, regional sales managers, and a regional vice president. Some functions like information technology, customer account management, and inside sales will be moved to other locations. Published reports suggested that SolarCity used aggressive sales tactics and may have been in serious financial trouble when it was acquired by Tesla.

suggested that SolarCity used aggressive sales tactics and may have been in serious financial trouble when it was acquired by Tesla. To be noted,  Solar City co-founder Lyndon Rive who served as the CEO until 2017 and his brother Peter Rive are the cousins of Tesla honcho Elon Musk. The solar industry is under extreme price pressure from Chinese solar panels and installations have been dropping in recent times.

NO LOVE AT ANGIE’S LIST (ACQUISITION/MERGER)

In order to eliminate duplicative positions, Angie’s List will be laying off 230 employees in their Indianapolis, Indiana headquarters as part of its anticipated merger with HomeAdvisor. Approximately 70 sales employees were released earlier. Look for further cuts as billionaire Barry Diller’s ruthless cost cutting team continues to “optimize” the acquired organization. IAC’s HomeAdvisor and Angie’s List will be rolled into a new publicly-traded company, to be called ANGI Homeservices Inc., and which may be up-valued by investors due to its size and leading industry position.

NO LOVE AT ELI LILLY (RESTRUCTURING)

Major pharmaceutical giant Eli Lilly has announced that it will be laying off approximately 8% (3,500) employees in a massive restructuring and redeployment of savings in other profitable areas. One reason for the restructuring is the loss of billions in sales of patented drugs such as the erectile dysfunction drug Cialis. 

NO LOVE AT NIKE (RESTRUCTURING)

Hear that “swoosh,” it is the sound of 745 jobs leaving Nike, Inc. as part of its massive restructuring efforts announced previously. Marc Bohn, a Nike vice president, informed the authorities that, “In June 2017, we announced that we will be shifting to the Consumer Direct Offense, a new company alignment that allows Nike to better serve the consumer personally, at scale." As part of that restructuring, Nike undertook workforce reductions in July and is now implementing an additional round of workforce separations.” 

NO LOVE AT ANHEUSER BUSCH (RESTRUCTURING)

Major brewer Anheuser Busch, a division of AB InBev, is laying off approximately 400 jobs related to its “The High End” product line. According to management, Anheuser-Busch is rethinking their “High End” business model and may be consolidating sales and operations to promote efficiencies. 

NO LOVE AT CINTAS (MERGER/ACQUISITION)

Cintas Corporation, the largest uniform rental company, has notified the state of Minnesota that it will lay off 232 people in the restructuring process to eliminate duplicative positions in their purchase of G&K Services, Inc. 

NO LOVE AT DEALER.COM

Cox Automotive of Atlanta, Georgia, the parent company of Dealer.com, recently implemented a cost cutting program that will result in approximately 950 layoffs. This will be the first time in the 20-year history that the Burlington, Vermont company, Dealer.com will lay off 45 people. What makes this notable is that Dealer.com was a unicorn, a company selling for $1 billion to Dealertrack in March 2014, and the combined company was subsequently acquired by Cox Automotive in October 2015 for $4.2 billion. 

A company spokesperson was quoted as saying, "Cox is 'right-sizing' after the 'very significant' acquisition of Dealertrack. The employees affected by the layoffs range from veteran workers with 10 to 12 years of experience to people who started in the past year or two.”

Although Cox appears to be committed to maintain the Burlington Office (approximately 1200 jobs), one can only wonder if the operation will be re-consolidated with its parent in the future to eliminate duplicative infrastructure costs. 

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