Disney is eliminating a total of 28,000 employees of theme parks in the United States due to the pandemic. The heavily affected company has terminated executives, salaried employees and about two-thirds of their part-time employees. Disney offers eliminated workers with job-placement services for 90 days.
“As heartbreaking as it is to take this action, this is the only feasible option we have in light of the prolonged impact of Covid-19 on our business, including limited capacity due to physical distancing requirements and the continued uncertainty regarding the duration of the pandemic,” Josh D’Amaro, chairman of the theme parks unit, said in a letter to employees.
There is no reveal of what percentage of the workforce is involved, but the theme parks are believed to have about 200,000 employees. The layoffs that Disney announced on Tuesday would reduce 14 per cent of the workforce.
Disney’s theme parks in California remain closed
California’s Disney parks remain closed while Florida parks that have reopened are underperformed. The virus has taken a toll on Disney’s theme parks revenue. The company reported less than a billion dollars revenue for the April-June quarter this year. In comparison with the huge revenue loss, Disney took in nearly $7 billion revenue the same period last year, 2019.
According to Bob Chapek, Disney’s CEO, the theme parks underwent a very high- level of cancellations. The cancellations were not what the traffic executives hoped for when Walt Disney World in Central Florida reopened in July. Along with the business downfall, Disney cuts back the parks’ visiting hours. Disney heavily relies on visitors from other states via air travels, but airlines are laying off 35,000 jobs this week. American Airlines Group Inc. has said that it is eliminating 19,000 employees. Meanwhile, United Airlines Holdings Inc. is eliminating about 12,000 employees.
“Unwillingness” to reopen
Disney partly blamed California Gov. Gavin Newsom (D) for public gatherings bans in his state in a statement. The situation claimed that the unwillingness to lift the restrictions to reopen theme parks in California has caused exacerbation. The eagerness to reopen theme parks in California is because California business does not rely much on outside travel compared to its Florida business.
A few experts believe the announcement of Disney made on Tuesday was to aim at Newsom to seek leverage.
Scott Smith, a professor at the University of South Carolina’s College of Hospitality, Retail and Sport said, “ Everything Disney does is for a strategic reason.”
He also added, “If a lot of these part-timers who are very seasonal and they’re just not having their hours picked up, it may not be as drastic as it sounds. But it grabs headlines, and that’s useful to Disney.”
The move Disney made was to put pressure on Newsom to do something so Disney in California can reopen.
D’Amaro said that California’s Disney theme parks could not wait any longer to reopen after seven months of closure. He also added that the company had attempted to hold out the business long enough before the layoff decision.
Disney’s parks outside of the United States, including in France and China, remain open. Recently, it is reported that there is a capacity increase for Disney’s parks of other countries.
During the pandemic, the workforce in the leisure and hospitality sectors are the most affected. In August, the employment rate has dropped more than 20 per cent compared to August 2019.
More Information About:
- Disney lays off 28,000 as coronavirus slams its theme-park business
- Disney to Cut 28,000 Jobs in One of Biggest Layoffs of COVID Era
Prepared by: Florin Hoo