Disney Orders Workers Back to Offices, Restaurants Delay Expansion, Consumer Inflation Expectations
Disney Orders Workers Back to Offices
Media and theme park giant Disney has joined prominent technology and finance companies calling on employees to come back to offices for at least part of the week as concerns about the pandemic subside. But it also comes as planned layoffs and hiring freezes are on the rise, with Goldman Sachs joining the list with reported plans to cut 3,200 workers this week.
Disney CEO Bob Iger told workers who are currently on hybrid home-office schedules that they must return to corporate offices at least four days a week starting March 1, according to a an internal email Monday obtained by CNBC, which first reported the news.
“As I’ve been meeting with teams throughout the company over the past few months, I’ve been reminded of the tremendous value in being together with the people you work with,” Iger said in the email. “As you’ve heard me say many times, creativity is the heart and soul of who we are and what we do at Disney. And in a creative business like ours, nothing can replace" what can stem from "being physically together, nor the opportunity to grow professionally by learning from leaders and mentors.”
Disney officials did not immediately respond to a request from CoStar News to comment. Iger returned to Burbank, California-based Disney as CEO in November, and the company is also among several announcing hiring freezes and job cuts in recent weeks. Disney joins othe technology and finance businesses that have called on workers to return to offices for at least part of the week, including Twitter, Uber, Snap, Vanguard Group and JPMorgan Chase.
Goldman Sachs, another company that has called workers back to offices in the past year, is also among those planning job reductions. The firm plans to lay off as many as 3,200 workers this week, as first reported by Bloomberg, citing sources familiar with the matter. CoStar News also confirmed the layoff plans from a person familiar with the situation.
While large-city office attendance has been rising during the past year, reaching an average peak of 49% of pre-pandemic attendance in October, most major cities have yet to reach 50% of pre-pandemic office use, according to security technology firm Kastle Systems.
Restaurants Delay Expansion
Nearly 40% of restaurant operators have postponed plans for expansion, according to a National Restaurant Association survey that found rising costs are still foremost on their minds among challenges for the coming year.
“Moderate but positive employment growth across the economy and elevated consumer spending in restaurants will allow the restaurant industry to kick off 2023 on a more optimistic note than the last few years, but operators remain braced for potential challenges in the new year,” Hudson Riehle, the trade group’s senior vice president of research, said in a statement.
The group’s latest monthly business conditions survey, involving 3,000 operators queried nationwide during November with results released Jan. 5, found 38% have postponed plans for expansion in a climate where food, labor and energy costs remain historically high.
Several national chains have not shied from expansion during the pandemic, but the vast majority of the nation’s restaurants are smaller, independent establishments. Respondents said food and labor costs each account for approximately 33 cents of every dollar in sales, with nearly another one-third of revenue taken up by costs including utilities, rent and maintenance.
That mean slim profit margins are expected to grow smaller in 2023 by half of survey respondents. To meet rising costs, 87% said they increased menu prices during the past year, 59% changed food and beverage offerings and 48% reduced operating hours. Most still plan to add workers in coming months, with more than 60% saying their restaurant does not have enough workers to meet customer demand.
Reduced Inflation Expectations
Consumers expect U.S. inflation to be at 5% a year from now, according to results of a December survey released Monday by the Federal Reserve Bank of New York. This was 0.2% below consumers’ November forecast and the lowest year-ahead inflation expectation reading since July 2021, Fed researchers said.
Consumers expect inflation to be at 3% three years from now, an estimate unchanged from November, and at 2.4% five years from now, up 0.1% from the November median prediction. Analysts have noted that consumer expectations about inflation among other economic conditions can affect plans to buy big-ticket items like homes and cars.
The New York Fed survey of approximately 1,300 households found consumers expect income to rise 4.6% in the coming year, a new high for the monthly survey. Consumers expect their household spending to rise by a median 5.9% in the coming year, down a full percentage point from their month-earlier prediction — due to a combination of lingering overall caution and expected lower inflation.
Annual inflation has generally been falling in recent months but remained near a 40-year high at 7.1% in November. The government is expected to announce the December inflation rate later this week, and the number could affect future Federal Reserve strategy aimed at taming inflation by raising lending rates.