Long-term closures and restricted attendance at Disney‘s California theme parks forced the company to lay off 28,000 in its parks, experience, and consumer goods division, the company said.
Josh D’Amaro, Head of Disney’s Parks, outlined some “difficult decisions” that the company had to take following the coronavirus pandemic in a memo sent to its employees on Tuesday, including the end of thousands of its workers. The company’s stock decreased to less than 2% after Tuesday’s closing bell.
According to D’Amaro ‘s announcement on Tuesday, nearly 67 percent of the 28,000 employees laid off were the part-time staff. The corporation refused to dismantle dismissals through individual park sites.
Although Disney’s Theme Parks was able to reopen with minimal capacity in Florida, Paris, Shanghai, Japan, and Hong Kong both California Adventure and Disneyland remained shut-off in Anaheim, California. The products segment may be a vitally important a part of Disney’s business. Last year, it accounted for 37% of the company’s $69.6 billion in total revenue.
Disney has been hemorrhaging money since the outbreak began. within the second quarter, the corporate reported a loss of $1 billion in operating income thanks to the closures of its parks, hotels and cruise lines. Within the third quarter, the corporate reported a steeper loss of $3.5 billion.
D’Amaro and his team are working to influence California state legislators to supply guidelines for reopening parks. Last week, the corporate provided a media update to spotlight the success it’s seen at its Florida parks and internationally in Paris, Shanghai and Japan.
The virtual update also showcased the updated safety measures it’s in the place already. These policies include requiring masks, having sanitation stations widely available, online ordering for meals, and along with cashless pay. Disney’s coronavirus woes are “exacerbated in California by the State’s unwillingness to lift restrictions that might allow Disneyland to reopen,” D’Amaro said.
Gov. Gavin Newsom outlined a replacement four-tier reopening framework in late August for alleviating restrictions on California’s businesses counting on the extent of Covid-19 spread in individual counties.
Orange County, which is where Disneyland operates, remains within the “substantial” tier, and theme parks must remain closed, consistent with the state’s website. Orange County is reporting an area positivity rate, or the share of total tests that have positive results, of 3.1% — below the statewide 3.4% rate.
However, the county is reporting roughly 4.4 new Covid-19 cases per 100,000 people daily, preventing it from moving forward with more reopening. Newsom told reporters during a press briefing at the top of August that state officials were “actively” working with Disneyland and other theme parks in California.
Disney’s memo to employees:
I write this note to you today to share some difficult decisions that we have had to make regarding our Disney Parks, Experiences, and Products organization.
Let me start with my belief that the heart and soul of our business is and always will be people. 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.
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. 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.
As you can imagine, a decision of this magnitude is not easy. For the last several months, our management team has worked tirelessly to avoid having to separate anyone from the company. 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.
Thank you for your dedication, patience and understanding during these difficult times. I know that these changes will be challenging. 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. We encourage you to visit The Hub or the WDI Homepage for any support you may need.
For those who will be affected by this decision, I want to thank you for all that you have done for our company and our guests. While we don’t know when the pandemic will be behind us, we are confident in our resilience, and hope to welcome back Cast Members and employees when we can.
Chairman of Disney Parks, Experiences and Products