Disney’s theme park division is laying off 28,000 domestic employees, Disney Parks chairman Josh D’Amaro announced Tuesday, as Walt Disney World and Disneyland reckon with continued closures and a sharp decline in revenue amid the ongoing Covid-19 pandemic.
The layoffs will include executives, salaried and hourly employees across Disney’s entire Parks, Experiences and Products division, with 67% of those laid off being part-time employees.
D’Amaro cited the limited capacity at Walt Disney World as well as the California state government’s “unwillingness to lift restrictions that would allow Disneyland to reopen.”
Disneyland has remained closed since March due to government restrictions, though Disney and local government officials have been waging a pressure campaign urging California leadership to green light the park’s reopening.
Walt Disney World reopened in July, but capacity remains reduced at theme parks, restaurants and shops, and some of the resort’s restaurants, hotels and attractions have remained closed due to the lower attendance.
Walt Disney World furloughed 43,000 employees in April after initially continuing to pay workers when the parks closed in March—the company continues to pay furloughed employees’ health benefits—and while some were brought back when the parks reopened, Disney informed some employees in August that their furloughs were likely to extend longer than six months.
“We simply cannot responsibly stay fully staffed while operating at such limited capacity,” D’Amaro said in a letter to employees. “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.”
The Service Trades Council Union, which represents more than 40,000 of Walt Disney World’s employees, said in a statement Tuesday that it was “disappointed to learn that the Covid-19 crisis has led Disney to make the decision to layoff Cast Members,” and is negotiating with Disney to determine the effect on unionized employees. Actors’ Equity, which represents approximately 750 Walt Disney World performers, said in a statement it was also in touch with Disney, and noted that laid off workers in Florida will only receive $275 in state unemployment benefits without federal coronavirus legislation being passed in Congress.
Walt Disney World is the largest single-site employer in the U.S., according to Disney, with more than 70,000 employees based in Central Florida. Disneyland is the largest employer in Orange County, California, with 30,000 employees.
Disney’s theme park closures have had a significant impact on the company’s finances, with the parks division reporting a $2 billion loss in its third quarter due to the ongoing closures. The company took in $11.78 billion in total revenue in the third quarter, with the parks division earning $983 million, an 85% decline over last year. CEO Bob Chapek also noted on the company’s Q3 earnings call in August that attendance at Walt Disney World had not yet rebounded as much as the company had hoped, as the parks’ July reopening drew widespread controversy amid the surge in Florida’s Covid-19 cases. Disney’s relationship with its employees and bringing them back to work during the pandemic has also been a source of contention: Some Walt Disney World employees launched a petition urging the resort to delay its reopening amid Florida’s rising case count, while Actors’ Equity barred union performers from working at Walt Disney World for a month in a dispute over Covid-19 testing. While Disneyland’s theme parks remain closed, the resort’s Downtown Disney shopping district has reopened, and cast members have raised concerns about the resort’s Covid-19 protocols for employees, according to a report by the Daily Beast.
Lawmakers Demand Newsom Allow Disneyland To Reopen (Forbes)
Hong Kong Disneyland Reopens For A Second Time As California Theme Park Closure Continues (Forbes)
Disney Exec Pleads With Calif. Governor To Reopen Disneyland (Forbes)
Disney, Universal Hit Capacity Over Labor Day Weekend, But Theme Parks Still Face Tough Fall (Forbes)