Disney Announces Mass Worker Furloughs As Pandemic Pummeling Continues
In good times, few media giants were more successful than the Walt Disney Co. But with the global economy in tatters, with pandemic-related spending on recreation plummeting, Disney is now suffering more than almost any other entertainment company.
The Burbank-based Disney, with some 220,000 employees worldwide, said in a statement Thursday that it would furlough an unspecified number of workers “whose jobs aren’t necessary at this time.” The cuts are set to take effect on April 19.
While many smaller companies with a narrow business focus have been devastated by the coronavirus outbreak — think airlines and restaurants — the pandemic has hit almost every one of Disney’s core businesses.
Disney’s dozen theme parks, which contribute almost half of the company’s profits, are locked up around the globe. The company’s cruise ships are empty, as are theaters where musicals like “The Lion King” would play. With essentially every domestic and international multiplex shut down, there’s no way Disney can exhibit its movies, which include the Pixar, Marvel and LucasFilm brands. The release dates for the presumptive blockbusters “Mulan” and “Black Widow” have been scrapped.
With no new movies coming out, related consumer product sales are stalled, and the nearly 400 Disney Stores around the world are closed. As you might have noticed, there’s not a whole lot of live sports these days, so Disney’s massive ESPN franchise can’t broadcast games or highlights, which has cost the network millions in lost advertising and viewership.
The majority of Disney employees work in the division that includes theme parks. Disney said it would continue to provide health insurance to its furloughed workers. It’s unclear how the company will work with unions that cover some employees, where furloughs might not be permissible.
Earlier this week, Disney said it would cut the pay of its leadership staff, including new CEO Bob Chapek. While the overall stock market is off sharply this year, the price of Disney’s shares have fallen even worse, and are off about 35% so far in 2020.
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