Walt Disney Co. announced 28,000 layoffs in its parks, experiences and products segment Tuesday, financial victims of protracted theme park closures caused by the coronavirus pandemic.
The massive downsizing was the most eye-opening of several major cost-cutting measures by Disney
, which has lost billions of dollars in potential revenue since the closings imposed by COVID-19 since March because its amusement parks, manufacturing units and cruise ships ceased operations. Disney said in its latest earnings report that COVID-19 cost its theme parks business approximately $ 1 billion in operating income in the second quarter of its fiscal year.
“Given the ongoing impact of COVID-19 on our business, including limited capacity due to physical distancing requirements and ongoing uncertainty about how long the pandemic will last – exacerbated in California by the unwillingness of the state to lift restrictions that would allow Disneyland to reopen – We made the very difficult decision to start reducing our workforce in our Parks, Experiences and Products segment at all levels. We've kept idle performers on vacation since April while paying healthcare benefits, ”Josh D. & # 39; Amaro, chairman of Disney Parks, Experiences and Products, said in a statement Tuesday.
Disneyland and California Adventure in Anaheim, California will remain closed, while theme parks in Florida, Paris, Shanghai, Japan and Hong Kong have reopened with limited capacity. The California Department of Health moved some counties to new "levels" Tuesday to allow some businesses to reopen, but Disneyland's hometown of Orange County didn't make the cut due to a late surge in some cases.
Disney originally planned to reopen Disneyland on July 17th, but that reopening has been postponed indefinitely.
“As heartbreaking as it is to take this action, it is the only possible option we have given the ongoing impact of COVID-19 on our business, including limited capacity due to physical distancing requirements and ongoing uncertainty about how long the pandemic will last “, Wrote D & # 39; Amaro in a letter to the staff.
Around two-thirds of the 28,000 who lost their jobs worked part-time, according to D’Amaro. The company did not disclose how many people were specifically fired from the parks, and executives and other division employees also saw cuts.
Disney's parks and resorts division employs more than 100,000 people in the United States.
Disney shares were down 1.4% after close of trading on Tuesday.