The Walt Disney Company has announced that it will lay off 28,000 employees in the US due to the impact of the coronavirus pandemic on its parks and resorts business.
The impact of the coronavirus pandemic has forced Disney to cut 28,000 jobs in the US. Disney said the affected jobs will be those from its Parks, Experiences and Products unit and that 67% of the employees to be laid off will be part-time workers.
There are over 100,000 US employees in the company’s parks and resorts division.
Impact of the coronavirus pandemic on Disney parks and resorts
The pandemic forced Disney to shut down its theme parks globally, dealing a large impact on the company’s earnings.
The company closed its its Shanghai and Hong Kong theme parks just before the Lunar New Year holiday in January and proceeded to shut down Tokyo Disneyland and DisneySea in Tokyo in February.
For the first three months of the year, Disney recorded a 91% decrease in profits. The company’s parks, experiences and products unit posted a 58% decline in operating income, compared to the previous year.
According to Disney, its operating income on its Parks, Experiences and Products segment decreased by approximately $1 billion due to lost revenue while it estimates the impacts of the coronavirus pandemic across all its businesses to amount to $1.4 billion.
All of the firm’s 12 Disney parks in North America, Asia and Europe have stopped operations since March 15.
Laying off 28,000 workers
Josh D’Amaro, the chairman of Disney Parks, explained that the job cuts were needed because of the “prolonged impact” of coronavirus on business, including “limited capacity due to physical distancing requirements and the continued uncertainty regarding the duration of the pandemic.”
In a statement, D’Amaro said: “As difficult as this decision is today, we believe that the steps we are taking will enable us to emerge a more effective and efficient operation when we return to normal.”
He emphasized that Disney staff have always “been key to our success, playing a valued and important role in delivering a world-class experience.”
“We look forward to providing opportunities where we can for them to return,” he added.
D’Amaro also mentioned that state of California is partly to be blamed for the layoffs for its “unwillingness to lift restrictions that would allow Disneyland to reopen.” Disneyland and California Adventure, the company’s flagship resorts in the state have been closed since March.
In June, Disney was prompted to postpone the proposed phased opening of its two parks in Anaheim on July 17 because state officials have yet to issue theme park reopening guidelines until after July 4.
The company said: “Given the time required for us to bring thousands of cast members back to work and restart our business, we have no choice but to delay the reopening of our theme parks and resort hotels until we receive approval from government officials.”
In a memo to employees, D’Amaro wrote: “As you can imagine, a decision of this magnitude is not easy. 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.”