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Fallout From the Disney-Fox Deal: Four Words the Companies Used That Should Make Employees Nervous

Dec 14, 2017  •  Post A Comment

One message contained in news about the agreement announced today in which Disney will acquire much of the 21st Century Fox assets is at least a little bit ominous for employees of the companies.

Business Insider notes that in their press release the companies said the acquisition would bring at least $2 billion in “cost savings from efficiencies” — four words that appear to translate at least in part to “layoffs.”

The pertinent passage in the press release reads: “The acquisition is expected to yield at least $2 billion in cost savings from efficiencies realized through the combination of businesses, and to be accretive to earnings before the impact of purchase accounting for the second fiscal year after the close of the transaction.”

You can read the full announcement by clicking here.

“In corporate speak, ‘cost savings from efficiencies’ indicates areas where investment bankers or the firms involved in the deal have identified redundancies or opportunities to make the combined company leaner, thus saving on costs,” Business Insider reports. “While so-called synergies can also mean cutting redundancies in things like software and machinery, a large chunk of the savings typically comes from reduced employee headcounts.”

The report also notes: “As we’ve pointed out, these synergies often aren’t what they’re cracked up to be and don’t help earnings after mergers. Many of these cost-cutting measures may never come to fruition.”

For more about the acquisition, please click here to read our initial report from this morning, including links to coverage by Bloomberg, The New York Times and The Hollywood Reporter.

3 Comments

  1. The efficiencies can also come from not needing to hire as many new employees to accomplish the goals of activating old franchises and creating the new direct to consumers service.

    • Yeah, right. If it happened here, it would be a first.

  2. “cost savings from efficiencies” AKA “synergies.”

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