Disney to sack 28,000 US employees due to coronavirus

For six months, Disney has kept tens of thousands of theme park workers on furlough with full health-care benefits in hopes that a light at the end of the pandemic tunnel would appear. On Tuesday, Disney conceded that none was coming.

The company said it would eliminate 28,000 theme park jobs in the United States, or about 25 per cent of its domestic resorts workforce.

“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 Disney Parks, Experiences and Products, said in an email to “cast members,” Disney’s term for its theme park workers.

About 67 per cent of the layoffs will involve part-time jobs that pay by the hour. However, executives and salaried workers will also be among those laid off. Disney’s theme parks in California and Florida employed roughly 110,000 people before the pandemic. The job cuts, which will come from both resorts, will reduce that number to about 82,000.

Disneyland in California has remained closed because Gov. Gavin Newsom has not allowed theme parks in the state to restart operations. About 32,000 people work at the Disneyland complex and the majority are unionized and have been on furlough since April.

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D’Amaro said in a statement that the layoffs were “exacerbated in California by the state’s unwillingness to lift restrictions that would allow Disneyland to reopen.” Disney held a virtual news conference Sept. 22 in an attempt to pressure Newsom to lift restrictions. “The longer we wait, the more devastation to the Orange County and Anaheim communities,” D’Amaro said then. “It’s time.”

A spokesman for Newsom had no immediate comment.

In Florida, where government officials have been much less restrictive, Walt Disney World reopened on a limited basis in mid-July. About 20,000 union workers, or roughly half of the resort’s unionized employees, were called back for the reopening. The remainder have stayed on furlough.

But attendance at Disney World has been weaker than Disney expected. In particular, families have not felt safe flying to Florida for vacation, according to travel agents. Families are also delaying visits because they don’t want to pay for Disney excursions when the experience remains limited — no fireworks, fewer dining options, no hugs from Mickey Mouse, shorter park hours — and they have to wear face masks.

Disney’s zealous theme park safety procedures appear to be working. University epidemiologists and public health officials have said that — as far as they can tell — there have been no outbreaks among Disney workers or guests. Disney has declined to comment except to note that new infections in Florida have dropped sharply since Disney World reopened.

Revenue at Disney’s worldwide theme park division totaled $1 billion in the most recent quarter, an 85 per cent decline from the same period a year earlier. Operating profit plunged by $3.7 billion, resulting in a quarterly loss of $2 billion. D’Amaro said Tuesday that the restructuring would create a more “effective and efficient operation when we return to normal.”

The rest of Disney has been bouncing back. Live sports returned to ESPN in August. Movie and television production has restarted, although Disney continues to postpone film releases. Disney+ has been growing rapidly enough to keep Disney’s stock price relatively high at $125, down 3 per cent from a year ago.

Read: Lockdown: Slack slowdown frustrates remote workers in US

Central Florida’s once-booming leisure and hospitality industry has been decimated by the pandemic. Unemployment in Orange County — home to Disney World, the Universal Orlando Resort, SeaWorld and dozens of mom-and-pop tourist attractions — stood at 11.6 per cent in August, up from 3.1 per cent in August 2019, according to the Florida Department of Economic Opportunity. Osceola County, which abuts Disney World to the south, had 15.1 per cent unemployment in August, up from 3.5 per cent.

Statewide, the August unemployment rate in Florida was 7.4 per cent.

Universal Orlando laid off a steady stream of employees over the summer and recently notified state officials that about 5,400 workers had been placed on extended furlough. SeaWorld laid off 1,900 employees at its Orlando properties this month. A few days before its layoffs, SeaWorld surprised workers by altering its severance policy, moving to a discretionary system from a fixed formula based on tenure.

Workers at Universal and SeaWorld are not unionized.

“The layoffs and furloughs have been devastating,” said Mike McElmury, trustee of Teamsters Local 385, which represents about 5,000 Disney World bus drivers, laundry workers and entertainers, including those who greet visitors in costume as Disney characters. At least 2,000 were still on furlough as of Monday. “We’re at the point where people are having a hard time figuring out where they will get their next meal,” McElmury said.

Anaheim is in similarly rough shape. Disney had planned to reopen the property on July 17 with the same safety protocols as in Florida. But Disney abandoned that plan after unionized Disneyland employees told Newsom that they worried that Disney was moving too fast; Newsom threw the brakes on a regulatory process that would allow California theme parks to reopen.

Unemployment in Anaheim reached 15 per cent in July, the most recent month for which data is available, up from 3.3 per cent in July of last year. The Anaheim Chamber of Commerce said this month that Disneyland’s closure had cost local municipalities $1.3 billion in taxes and other revenue.

“It’s a disaster,” Harry Sidhu, Anaheim’s mayor, said at a Sept. 16 news conference in which he pleaded with Newsom to allow Disneyland to reopen. Sidhu was joined by officials from nearby Garden Grove and Buena Park, home to the Knott’s Berry Farm theme park, which had 2019 attendance of roughly 4 million.