Walt Disney’s parks chief Josh D’Amaro said Tuesday the company will be laying off 28,000 staff at its theme parks, the segment of the company hardest hit by the pandemic. The cuts will come at every level, including the executive, salaried and hourly workers, though the largest portion of the cuts – about 67% – will be part-time workers.
In statement and memo to employees, D’Amaro called the move painful and said it’s one Disney had hoped to avoid. They had initially tried to keep as many employees on as they could, using furloughs and extended health benefits, but as the pandemic situation drags on with no clear end in sight, this plan became unsustainable.
Parks worldwide shuttered in March. Many are reopened at reduced capacity, including Disney World in Orlando, which resumed most operations in July. Disneyland in Anaheim, California, though, remains closed, and there’s no sign yet that the state’s top health official Dr. Mark Ghaly will have any good news for them in the near term.
This is having a profound affect on The Walt Disney Company. The parks make up about a third of all the money they take in, with most of that coming from the U.S. locations. Just to give you some perspective, Disney took a $1 billion hit to its parks business in its fiscal second quarter ended in March. That’s just what they lost. That expanded to a $3.5 billion operating downturn for the fiscal third quarter ended in June. The company has a September fiscal year. Having the Disney Resort in Anaheim closed is really knocking the stuffing out of them, and as you might imagine, they’re pretty anxious to get back to business as usual. Unfortunately, the pandemic itself isn’t open to the idea of discussing it with them.
Read D’Amaro’s statement and letter here:
STATEMENT FROM JOSH D’AMARO, CHAIRMAN, DISNEY PARKS, EXPERIENCES AND PRODUCTS (DPEP)
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 – exacerbated in California by the State’s unwillingness to lift restrictions that would allow Disneyland to reopen – we have made the very difficult decision to begin the process of reducing our workforce at our Parks, Experiences and Products segment at all levels, having kept non-working Cast Members on furlough since April, while paying healthcare benefits. Approximately 28,000 domestic employees will be affected, of which about 67% are part-time. We are talking with impacted employees as well as to the unions on next steps for union-represented Cast Members.
Over the past several months, we’ve been forced to make a number of necessary adjustments to our business, and as difficult as this decision is today, we believe that the steps we are taking will enable us to emerge a more effective and efficient operation when we return to normal. Our Cast Members have always been key to our success, playing a valued and important role in delivering a world-class experience, and we look forward to providing opportunities where we can for them to return.
LETTER TO EMPLOYEES FROM JOSH D’AMARO, CHAIRMAN, DISNEY PARKS, EXPERIENCES AND PRODUCTS (DPEP)
September 29, 2020
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.
Disney has been making other adjustments in its business model as well. The popular D23 Expo has been pushed back an entire year, and they have added a feature called GroupWatch to their popular Disney+ streaming service so that people can have watch parties without physically endangering themselves.