Disney is set to lay off nearly 30,000 workers after months of limited operations, following forced closures of its Californian operations.
Head of Disney’s parks Josh D’Amaro sent a memo to employees on Tuesday stating that significant cuts to staff are necessitated by the pandemic and lockdowns. According to CNBC strict social distancing regulations have hurt the company's ability to operate its theme parks especially in its California Adventure and Disneyland theme parks in Anaheim, California, which remain closed.
“Earlier this year, in response to the pandemic, we were forced to close our businesses around the world. Few of us could have imagined how significantly the pandemic would impact us — both at work and in our daily lives,” D’Amaro stated. “We initially hoped that this situation would be short-lived, and that we would recover quickly and return to normal. Seven months later, we find that has not been the case. And, as a result, today we are now forced to reduce the size of our team across executive, salaried, and hourly roles.”
The plan is to cut 28,000 full-time and part-time positions, thousands which have been furloughed for months with healthcare coverage but zero salary or wages. Little to no information has been published about how the cuts will be distributed across its various parks.
Disney has emphasized the impact the Californian lockdown policies have had on it’s business, according to CNBC.
“For the last several months, our management team has worked tirelessly to avoid having to separate anyone from the company,” D’Amaro stated. “We’ve cut expenses, suspended capital projects, furloughed our cast members while still paying benefits, and modified our operations to run as efficiently as possible, however, we simply cannot responsibly stay fully staffed while operating at such limited capacity.”
“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,” he continued.
According to The Wall Street Journal, the staffing cuts represent roughly 13% of the pre-pandemic workforce of 223,000 employees. Disney Stock dropped by 1% on Wednesday following the news.
"We have no choice but to delay the reopening of our theme parks and resort hotels until we receive approval from government officials," Disney Parks tweeted. "Once we have a clearer understanding of when guidelines will be released, we expect to be able to communicate a reopening date."
"To our California government officials, particularly at the state level, I encourage you to treat theme parks like you would other sectors. Help us reopen. We need guidelines that are fair and equitable," said Josh D'Amaro, chair of Disney Parks, according to Theme Park Insider. "The longer we wait, the more devastating the impact will be to Orange County and the Anaheim communities and the tens of thousands of people who rely on us for employment."
The amusement park industry has taken a heavy blow from the ongoing pandemic. The company is in negotiations with union representatives on moving forward with downsizing.
“Thank you for your dedication, patience and understanding during these difficult times. I know that these changes will be challenging,” D’Amaro said. “It will take time for all of us to process this information and its impact. We will be scheduling appointments with our affected salaried and non-union hourly employees over the next few days. Additionally, today we will begin the process of discussing next steps with unions.”