Disney's Latest Announcement Shows There Could Be Trouble Ahead
Disney may never be the same again after the coronavirus pandemic.
The coronavirus pandemic has cost millions of Americans their jobs and forced hundreds of companies to shut their doors. The most recent victim of company cuts is one of America's largest, most profitable organizations: Disney. Throughout the pandemic, Disney has held out hope that they would make a full comeback, but so far, that has yet to happen. According to CNBC, Disney announced on Sept. 29 they would be laying off 28,000 employees.
The U.S. employees affected by the cut are from Disney's parks, experiences, and consumer products division, which accounts for 37 percent of Disney's $69.6 billion in total revenue, per CNBC. According to CNN, the Disney parks and resorts division alone is responsible for employing over 100,000 people in the U.S.
As a result of forced park closures due to COVID, the company's profits dropped by 91 percent in the first three months of 2020, CNN reports. Disney parks were able to open at limited capacity in Florida, Paris, Shanghai, Japan, and Hong Kong, but the original California park remains closed. And while Disney is working to persuade California legislators to develop guidelines for reopening the park safely, Gov. Gavin Newsom has yet to make any allowances.
Newsweek obtained the memo sent out by Josh D'Amaro, chairman of Disney Parks, Experiences and Products. The memo told employees that despite the company's efforts to reopen the parks and retain employees, it is no longer possible to keep a full staff while operating at limited capacity.
"We initially hoped that this situation would be short-lived, and that we would recover quickly and return to normal," D'Amaro wrote. "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."
D'Amaro claims that the company has done everything in its power to avoid laying off employees, but ultimately those efforts were not enough. "For the last several months, our management team has worked tirelessly to avoid having to separate anyone from the company," he continued. "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."
Whether this significant employee cut is enough to keep Disney afloat without having to take further drastic actions remains to be seen. And to see how Disney parks look different now, check out these photos from Disney World's Reopening Amid Coronavirus.