There is no indication as to how many layoffs are expected.
In a bid to calm employees worried about their jobs as Walt Disney prepares to absorb most of 21st Century Fox, a top human resources executive from the Rupert Murdoch-controlled company issued a memo Monday promising "generous severance" to soon-to-be laid-off workers.
"Shared services employees who will not join Fox will automatically become Disney employees, and Disney, post-close, will make all employment decisions," chief human resources officer Thomas Gaissmaier wrote in his memo.
"While all of you will know prior to closing whether you will join Fox or Disney, some of those decisions might be right up to the date of closing," Gaissmaier wrote.
In his memo, "Fox" refers to a company that will be made up of the assets left behind once Disney completes its $71.3 billion partial takeover early next year. Disney is getting the film and TV studio, cable channels like FX and Nat Geo, 30 percent of Hulu, Star India and more, while Fox will keep the broadcast network, Fox News Channel, Fox Business Network, FS1 and FS2.
"In the event there isn’t a home for you at Disney or Fox, we’ve made sure there will be a generous severance policy. Anyone whom Disney decides not to retain within the first year after close will be entitled to severance," Gaissmaier wrote.
The executive acknowledged in his memo that jobs are at stake, though there is no indication as to how many layoffs are expected. Disney has about 195,000 employees to Fox's 22,000, many of which will be redundant post-merger. Richard Greenfield of BTIG estimates 5,000-10,000 workers will lose their jobs as Disney looks for $2 billion in post-acquisition synergies.
Changes are coming fast as both companies prepare for the deal to close. On Monday, for example, Fox appointed some legal and PR executives — most notably, former White House communications director Hope Hicks was named executive vp and chief communications officer.
Also Monday, Disney announced that Peter Rice, currently the president at 21st Century Fox, will become chairman of Walt Disney Television and co-chair of Disney Media Networks, where he will oversee all of Disney's TV assets except for ESPN; and that Fox TV Group chairman/CEO Dana Walden will be named chairman of Disney TV Studios and ABC Entertainment. Ben Sherwood, the current boss at Disney TV, will stick around through a transition period and leave shortly after the Fox-Disney deal closes.
Gaissmaier's entire memo is below:
Many of you have reached out to HR with questions about people decisions and planning processes regarding both FOX and Disney.
The objective of this note is to address your questions as much as answers are available at this point. We ask for your continued patience and understanding that answers to a number of your questions are still being worked through. We will continue to provide updates as they become available.
This update is focused on the overall process and timeline of people decisions. You can read more about the recent leadership announcements at FOX here and Disney here.
Overall integration and timeline
At the direction of Lachlan and James, a small group of leaders across businesses and functions has been working on the separation planning for the future FOX and the integration planning with Disney. They will engage others as needed.
We expect the transaction to close in the first half of 2019, as previously communicated. You might have heard January 1. This is not confirmed. In the interest of preparedness, we have asked integration teams to develop contingency plans so that we could be ready if we receive all required approvals as early as January 1.
FOX is making great headway to stand up the new company. Keep in mind that FOX needs to be a completely functional and successful business on the day this deal closes and the new company will need to be fully staffed. The timing of the selection decisions will vary by function and business, depending on size and complexity. It is consequently expected that some colleagues will have discussions sooner than others.
Principally, colleagues at business units going to FOX will not be part of a selection process as they will continue in their current roles. Shared services employees who will not join FOX will automatically become Disney employees, and Disney, post-close, will make all employment decisions. While all of you will know prior to closing whether you will join FOX or Disney, some of those decisions might be right up to the date of closing.
After the regulatory approval by the US Department of Justice and the shareholder vote in late July, Disney started engaging select business and functional leaders across 21CF to understand the current organization structure, operating practices and procedures.
Similar to FOX, Disney is working to design and staff the integrated future organization. We expect a few of those decisions will be made and announced prior to or at close. However, given the scale and complexity, many or even most of the organizational and staffing decisions will likely be made after closing. The timing will vary by business, function and country – due to statutory and local requirements. Unless otherwise communicated, you should assume your current role will continue unchanged.
And, in the event there isn’t a home for you at Disney or Fox, we’ve made sure there will be a generous severance policy. Anyone who Disney decides not to retain within the first year after close will be entitled to severance. This also applies if you received and declined an offer from FOX.
Going forward, you will receive several updates about how the deal may impact you. While we will continue to operate as the standalone 21CF until the transaction closes, we understand that a lot of uncertainty remains.
In the meantime, we’d like to thank you for your continued patience and dedication.