Disney to lay off 28,000 employees as COVID-19 continues to hammer its theme parks

Disney Parks to cut back hours in September

Former Walt Disney Imagineer Eddie Sotto says Disney will get the magic back, but until hospital practices are out of the parks, people will not flood back there.

The Walt Disney Company's Chairman of Parks, Experiences and Products, Josh D'Amaro, announced Tuesday evening that approximately 28,000 employees — known as "cast members" – will be laid off at its theme parks due to the ongoing impact of the coronavirus pandemic.

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Citing "limited capacity due to physical distancing requirements" and the uncertainty of the duration of the pandemic D'Amaro said the company has made "the very difficult decision to begin the process of reducing our workforce."

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As recently as Sept. 22, D'Amaro and Disney pleaded for help from the State of California. In making the announcement D'Amaro noted the decision was "exacerbated" by the "State’s unwillingness to lift restrictions that would allow Disneyland to reopen."

FOX Business requested comment from the State of California and at the time of publication were awaiting a response.

Approximately 28,000 domestic employees will be affected, of which D'Amaro said 67% are part-time. The company is "talking with impacted employees as well as to the unions on next steps for union-represented Cast Members."

D'Amaro said that the company believes the move will enable Disney to "emerge a more effective and efficient operation when we return to normal."

"Our Cast Members have always been key to our success, playing a valued and important role in delivering a world-class experience, and we look forward to providing opportunities where we can for them to return," he added.

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In a letter D'Amaro wrote to employees, which was obtained by FOX Business, the executive said "a decision of this magnitude is not easy."  He noted that the Disney management team "has worked tirelessly to avoid having to separate anyone from the company. We’ve cut expenses, suspended capital projects, furloughed our cast members while still paying benefits, and modified our operations to run as efficiently as possible, however, we simply cannot responsibly stay fully staffed while operating at such limited capacity."

Ticker Security Last Change Change %
DIS WALT DISNEY COMPANY 125.30 -0.74 -0.59%

Disney has taken a major financial hit due to the pandemic, with the closures of its theme parks costing a hefty $3.5 billion during the third quarter. The company posted a loss of $4.84 billion, or $2.61 per share, compared to a profit of 79 cents in the prior-year quarter, with revenue falling 42% to $11.78 billion.

Disneyland was scheduled to reopen on July 17, but the plan was sidelined after a resurgence of coronavirus cases in the state. Disney executives and state officials have yet to determine a new "opening" date for the California theme parks.

Meanwhile, Walt Disney World in Orlando, Florida reopened its theme parks in mid-July with masks, social distancing, mobile ordering, contactless payment and enhanced cleaning procedures in place. In addition, Hong Kong Disneyland reopened to the public for the second time on September 25. 

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The coronavirus has also prompted Disney to delay upcoming film releases, including Marvel's Black Widow and Steven Spielberg's West Side Story, until 2021.

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