Disney will lay off several thousand people. Some managers must also cut costs by up to 20%.
Twenty percent. Not 19. Not "around a fifth." Someone in a conference room picked that number and felt good about it.
Picture the manager who gets the memo. Cut 20% of your budget. Do you cut the people? The printer paper? The mouse costume dry cleaning? The answer is people. It is always people.
This is a company that sells happiness at roughly the price of a used sedan per family of four. It now sells that happiness with fewer humans attached.
Retail traders will see this headline and buy calls. They believe layoffs are bullish. They believe a company firing thousands of people is a company that has finally found its inner Mickey. They are correct about the mouse. They are wrong about everything else.
Will the stock move? Maybe. Maybe not. I have a chart open. It looks like a seismograph reading during a polite earthquake. I cannot help you.
Disney calls this efficiency. The employees call it Tuesday. The park characters will continue to wave, because the suit does not know what the spreadsheet decided.
If you bought Disney stock because layoffs excited you, congratulations. You are now emotionally aligned with a cartoon mouse's HR department, and he still has better risk management than you.
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