Entertainment giant Walt Disney Co. plans to lay off 32,000 employees by the end of March 2021 due to the continued impact of the coronavirus pandemic.
In its filing with the US Securities and Exchange Commission (SEC) on Wednesday, Disney indicated its plan to lay off about 32,000 workers by March of next year. The firm previously announce job cuts of around 28,000 in September.
Based on its most recent annual report, Disney has around 223,000 employees.
Massive job cuts, other measures
Last September, Disney 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 firm 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.
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.
In the SEC filing, Disney also warned that it may be prompted to remove its dividend in the future, and reduce or not make contributions to pension and retirement medical plans. It may also reduce investments in television and film productions, and furlough or lay off even more employees.
The company stated: “Some of these measures may have an adverse impact on our businesses.”
Refocusing its media business
Last October, Disney said it will undertake a major reorganization of its media and entertainment business and focus on streaming. Following the announcement, its shares went up by approximately 5% in after hours trading.
The media and entertainment giant’s reorganization will involve the creation of a new Media and Entertainment Distribution group that will be responsible for monetizing content via distribution and ad sales.
This particular business group will also handle the operations of the company’s streaming services, including Disney+, Hulu and ESPN+. The new group will be under the leadership of Kareem Daniel, who previously served as president of consumer products, games and publishing division.
Disney’s chief executive officer (CEO) Bob Chapek said: “Given the incredible success of Disney+ and our plans to accelerate our direct-to-consumer business, we are strategically positioning our Company to more effectively support our growth strategy and increase shareholder value.”
Possible flak from Senator Warren
News of the additional layoffs could potentially infuriate Democratic Senator Elizabeth Warren, along with Abigail Disney, a granddaughter of Roy O. Disney, who co-founded the company with his brother Walt in 1923.
Senator Warren has previously accused the company of making “short-sighted” business decisions and rewarding executives and shareholders through “hefty compensation packages,” dividend payments and share buybacks for years prior to the pandemic.
Abigail has publicly expressed her support for Warren’s dispute.