Wednesday, 30 September 2020

Disney to lay off 28,000 employees - a quarter of its resort staff - as coronavirus cripples its theme parks business

 Disney is set to lay off around 28,000 employees in the United States after prolonged closures and limited attendance have decimated its theme park business. 

The announcement was made in a letter to employees Tuesday from Josh D'Amaro, Disney's head of parks, who detailed several 'difficult decisions' the company has been forced to make amid the ongoing pandemic. 

One such decision includes ending the furlough of thousands of employees in its parks, experiences and products segment.

Around 67 seven percent of the 28,000 layoffs were part-time workers, but they ranged from salaried employees to nonunion hourly workers, Disney officials said. 

In total, the number of axed employees accounts for around 25 percent of Disney's domestic resort workforce.  

Disney is set to lay off around 28,000 employees across its US theme parks, experiences and consumer products segment as prolonged closures and limited attendance have decimated profits (It's Florida resort is shown above on re-opening day on July 14)

Disney is set to lay off around 28,000 employees across its US theme parks, experiences and consumer products segment as prolonged closures and limited attendance have decimated profits (It's Florida resort is shown above on re-opening day on July 14)

While the company has been able to operate its parks in Florida, Paris, Shanghai, Japan and Hong Kong at a limited capacity, California Adventure and Disneyland have remained shuttered in Anaheim since the spring. 

Prior to the pandemic, Disney's California and Florida parks employed roughly 110,000 people. The announced cuts, which will come from both resorts, will now reduce that number to around 82,000. 

Disney officials didn’t offer a breakdown of the layoffs between the two operations. 

'As you can imagine, a decision of this magnitude is not easy,' D'Amaro wrote in his letter to staff. 'For the last several months, our management team has worked tirelessly to avoid having to separate anyone from the company.'

D'Amaro continued that the company has cut expenses, suspended projects and modified operations but it wasn’t enough given limits on the number of people allowed into the park because of social distancing restrictions and other pandemic-related measures.

'We initially hoped that this situation would be short-lived, and that we would recover quickly and return to normal,' D'Amaro said. 'Seven months later, we find that has not been the case.

'We simply cannot responsibly stay fully staffed while operating at such limited capacity,' he added. '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'.

Disney officials said the company would provide severance packages for the laid-off Disneyland and Disney World employees, where appropriate, and also offer other services to help workers with job placement. 

'The heart and soul of our business is and always will be people,' D’Amaro continued. 'Just like all of you, I love what I do. I also love being surrounded by people who think about their roles as more than jobs, but as opportunities to be a part of something special, something different, and something truly magical.'


While the company has been able to operate its parks in Florida, Paris, Shanghai, Japan and Hong Kong at a limited capacity, California Adventure and Disneyland have remained shuttered in Anaheim since the spring (Anaheim resort showed in March, just days before its closure)

While the company has been able to operate its parks in Florida, Paris, Shanghai, Japan and Hong Kong at a limited capacity, California Adventure and Disneyland have remained shuttered in Anaheim since the spring (Anaheim resort showed in March, just days before its closure)

While its Florida park opened with a limited capacity in mid-July, footfall has fallen far short of Disney's expectations, with concerns about coronavirus safety reportedly a major factor.
Pictures from DailyMail.com show the deserted Florida park on opening day

While its Florida park opened with a limited capacity in mid-July, footfall has fallen far short of Disney's expectations, with concerns about coronavirus safety reportedly a major factor

July: No lines and few guests seen at Disney World as park reopens
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In a Tuesday statement to DailyMail.com, D'Amaro said the layoffs were 'exacerbated in California by the state’s unwillingness to lift restrictions that would allow Disneyland to reopen.'

While its Florida park opened with a limited capacity in mid-July, footfall has fallen far short of Disney's expectations, with concerns about coronavirus safety understood to be a major factor.  

Disney furloughed up to 43,000 workers while still paying for their health insurance at its Florida resort. Around 20,000 were brought back after it reopened in July. 

Furloughed workers in California also received health benefits over the last six months. Disney had been hoping to find the light in the end of the pandemic tunnel, though so far no rest-bite has appeared - prompting Tuesday's announcement.

Officials with the union that represents the actors who play Disney characters at the theme parks said they were having conversations with Disney officials about how they would be impacted, according to Actors’ Equity Association.

Officials with the Service Trades Council Union, which represents 43,000 workers at Disney World in Florida, said they were having similar conversations.

'We were disappointed to learn that the COVID-19 crisis has led Disney to make the decision to layoff Cast Members,' the coalition of six unions said in a statement.

About 950 workers from Unite Here Local 11 in California will be laid off starting Nov. 1, union leaders said.

Disney furloughed up to 43,000 workers while still paying for their health insurance at its Florida resort. Around 20,000 were brought back after it reopened in July (above)

Disney furloughed up to 43,000 workers while still paying for their health insurance at its Florida resort. Around 20,000 were brought back after it reopened in July (above)

Earlier this month, Gov. Gavin Newsom indicated that he was 'getting closer' to issuing guidelines for the reopening of parks in the state; however, three weeks on and no framework has yet been released.

'We will make determinations in real time — for theme parks, amusement parks and the like,' Newsom said on September 8. 'There’s still many areas where we are open-ended in terms of our negotiation, making progress and advancing in the same space.'

The parks, experiences and consumer products segment is paramount to Disney's business model. Last year alone, the sector accounted for roughly 37 percent of the company's total revenue of $69.9 billion. 

But within the first three months of 2020, the company's profit plummeted a staggering 91 percent.

In the most recent April-June quarter, Disney’s theme-park division had less than a billion dollars in revenue, after taking in nearly $7 billion in the same period in 2019.

In a statement, U.S. Rep. Val Demings, a Democrat from Orlando, said the layoffs showed the need for more coronavirus-related relief from Congress.

'These layoffs show yet again how desperately that assistance is needed by American households and businesses,' Demings said.

But it's not just its theme parks bearing the brunt of the pandemic. Last week, the company moved all major films out of the 2020 calendar, with the earliest rescheduled for May 2021.

Disney's film studio has not yet seen major layoffs, however.  

The company is trying desperately to drum up revenue elsewhere by feverishly promoting upcoming shows for its Disney+ service. 

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