Disney Lays Off 28,000, Mostly at 2 Theme Parks

Posted on by Sophie Robinson

Disney has announced that it will be eliminating tens of thousands of jobs at its resorts in California and Florida after suffering difficult losses from the coronavirus pandemic.

What We Know:

  • For the past six months, Disney has kept thousands of workers on furlough with full health benefits, but on Tuesday the company’s theme park division announced it would eliminate 28,000 jobs in the United States. Disney’s two theme parks will account for most of the layoffs, but Disney Cruise Line and Disney’s retail stores will also be affected.
  • “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,” Josh D’Amaro, chairman of Disney Parks, Experiences and Products, wrote in an email to Disney workers.

  • Before the pandemic, Disney’s theme parks in California and Florida employed roughly 110,000 people. The job cuts will come from both resorts. About two-thirds of the layoffs will involve part-time jobs that pay by the hour, but salaried workers and executives will also be among those facing layoffs.
  • Disneyland in California has not yet reopened as Governor Gavin Newsom has not allowed theme parks in the state to restart operations. The Disneyland complex employs about 32,000 people, the majority of which are unionized and have been on furlough since April. D’Amaro said in a statement that the layoffs were “exacerbated in California by the state’s unwillingness to lift restrictions that would allow Disneyland to reopen”.
  • On September 22, Disney held a virtual press conference in an attempt to pressure Newsom into allowing the park to reopen. Dr. Mark Ghaly, secretary of the California Health and Human Services Agency, has since confirmed the state is taking a “science-based approach” to reopening and that California can “minimize the health and economic risks” by holding off on reopening places that aren’t deemed essential, confirming that the parks would remain closed for the near future.
  • In Florida, government officials have been much less restrictive and Walt Disney World was able to reopen on a limited basis in mid-July with safety protocols in place. Disney World employed about 77,000 people in total before the pandemic and roughly half of the resort’s unionized employees, about 20,000 people, were called back for the reopening. The remainder of the employees have stayed on furlough.
  • Attendance at Disney World has been much weaker than the company had expected. Some families do not feel safe flying to Florida for vacation while others are choosing to delay their trips because they don’t want to pay for a Disney experience that might be “limited”. Currently, at Disney, there are no fireworks shows, fewer dining options are available, there are no hugs from Mickey Mouse, and park hours are shorter. Additionally, all guests have to wear face masks.
  • Disney World’s health and safety protocols aimed at curbing the pandemic’s spread appear to be working. Public health officials have said that to their knowledge, there have been no coronavirus outbreaks among guests or employees. Disney has not commented except to note that new infections in Florida have dropped sharply since Disney World reopened.
  • In the last quarter, revenue at Disney’s worldwide theme park division, which includes a still-closed cruise line and the Disney Store chain, totaled $1 billion, an 85% decline from the same period a year earlier. Operating profit also plunged by $3.7 billion, resulting in a quarterly loss of $2 billion. On Tuesday, D’Amaro said that the restructuring and layoffs would create a more “effective and efficient operation when we return to normal”.
  • Other assets of the Disney company are bouncing back from the pandemic. In August, live sports returned to ESPN. Although Disney continues to postpone film releases, movie and television production has restarted. Disney+ has been growing rapidly enough to keep Disney’s stock price relatively high at $125, down 3 percent from a year ago.
  • The communities around the Disney theme parks are also struggling. Unemployment in Orange County, Florida, home to Disney World, the Universal Orlando Resort, SeaWorld, and dozens of mom-and-pop tourist attractions, stood at 11.6% in August, up from 3.1% in August 2019, according to the Florida Department of Economic Opportunity. Unemployment in Anaheim, California, home to Disneyland, reached 15% in July, up from 3.3% in July of last year. The Anaheim Chamber of Commerce said this month that Disneyland’s closure had cost local municipalities $1.3 billion in taxes and other revenue.

D’Amaro calls the decision “heartbreaking” but “the only feasible option” due to “the continued uncertainty regarding the duration of the pandemic”. Disney officials said the company would provide severance packages for many laid-off employees and also offer other services to help workers with job placement.

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