Disney will lay off 28,000 employees in the United States as the coronavirus pandemic took its toll on its parks and resorts business. The layoffs will affect Disney's Parks, Experiences, and Products unit.
According to the company, 67% of the employees laid off will be part-time workers. Disney's parks and resorts division has more than 100,000 US employees.
Massive layoffs
Disney's theme parks were forced to shut down globally as the coronavirus pandemic hit several countries, this sudden halt to their operations had a huge effect, and the company is now dealing a huge blow to its bottom line.
The profit of Disney dropped 91% during the first quarter of 2020, according to The New York Times.
Josh D'Amaro, the chairman of Disney Parks, said that the staffing cuts were necessary because of the prolonged impact of the coronavirus pandemic on business. He said that it included limited capacity because of physical distancing requirements and the continued uncertainty regarding the duration of the pandemic.
D'Amaro said in a statement that as difficult as the decision is, they believe that the steps that they are taking will enable them to emerge a more effective and efficient operation when they return to normal.
D'Amaro added that Disney's employees have always been the key to the company's success, played a valued and important role in delivering a world-class experience. He said that they are looking forward to providing opportunities where the employees can return.
The chairman of Disney Parks also placed partial blame on the state of California for its unwillingness to lift restrictions that would allow Disneyland to reopen. Disneyland and California Adventure, the company's flagship resorts in California, have been closed since March.
Disney's reopening
Disney originally planned to reopen the resort located in Anaheim, California on July 17, but that reopening was delayed indefinitely due to the high number of COVID-19 cases in the state.
Disney World, the company's resort in Florida, closed its doors in March as well, but it began a phased reopening for its parks in July, according to CBS News.
The resort reopened with safety protocols and health measures that included reduced capacity at its parks and requiring all employees and guests to wear masks.
Disney notified its employees in April that because of coronavirus, it would furlough employees whose "jobs are not necessary at this time" starting on April 19.
D'Amaro stated that the decision of the management to go to this length is not easy. They have cut expenses, suspended capital projects, furloughed cast members will still be paying benefits, and modified their operations to run as efficiently as possible, but they can't simply stay fully staffed while operating at such limited capacity.
Disney has been affected by the coronavirus pandemic in a lot of ways, but its theme parks and resort business has arguably taken the biggest hit of all, according to LA Times.
Disney's park unit, which brought in more than $26 billion in fiscal 2019, was crushed during the second quarter of 2020.
The segment's operating profit fell 58% compared with the previous year, and the company reported to have lost a billion dollars in profit just a few weeks into the pandemic.
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