Disney is laying off nearly 30,000 workers after months of limited operations and, in the case of its California locations, forced closures in its theme parks.
Disney’s head of parks Josh D’Amaro sent a memo to employees on Tuesday outlining the need for significant staffing cuts necessitated by the pandemic and ensuing lockdowns. Strict social distancing regulations have cut deep into the company’s bottom line, especially as its California Adventure and Disneyland theme parks in Anaheim, California, remain completely shut down, according to CNBC.
“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 wrote. “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.”
Disney is planning to cut 28,000 full-time and part-time employees, thousands of which have been furloughed for months with healthcare coverage but no salary or hourly wages. Disney has not said how the cuts will be distributed across its various parks, though Disney emphasized the impacts California’s lockdown policies have had on its 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 said. “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 added.
The staffing cuts represent roughly 13% of Disney’s pre-pandemic workforce of 223,000 employees. Disney stock dropped 1% on Wednesday following the news, according to The Wall Street Journal.
The pandemic has hit the amusement industry particularly hard. Even at Disney’s parks in states that are free of onerous coronavirus regulations, traffic at the locations is still at low. Foot traffic at Disney’s theme parks in Orlando, Florida, is down about 80% from one year ago, according to analysts at Deutsche Bank.
The company is negotiating 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.”