Disney to axe 28,000 US employees due to Covid-19

NEW YORK • Walt Disney Co announced on Tuesday it will cut 28,000 jobs from its US parks and experiences division, pointing to depressed demand caused by the coronavirus and uncertainty on when it will recover.

The cuts were needed in light of social-distancing requirements, exacerbated by tough restrictions imposed by the California state government, the company said in a press release.

About two-thirds of the affected employees are the part-time staff.

“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,” said Josh D’Amaro, chairman of Disney Parks, Experiences and Products.

The move comes on the heels of Disney’s US$4.7 billion (RM19.74 billion) loss in the most recent quarter, which reflected the hit to its theme park business and the derailment or postponement of major movie releases.

These negative effects have been offset somewhat by soaring demand for the “Disney +” streaming service, where it steered premiers of “Mulan” and “Hamilton”.

The cutbacks jarred investors, who sent the shares plummeting 1.5% to US$123.57 in after-hours trading. The stock was already down 13% this year.

It’s the latest sign that travel and other experiences will be slow to recover from the pandemic. Disney joins airlines and other travel-reliant businesses in scaling back their workforces. American Airlines Group Inc has warned that it could furlough 19,000 employees, while United Airlines Holdings Inc is planning to cut about 12,000.

Disney’s move also spotlights its troubles with California, which has been slower than other areas to lift restrictions on theme parks.

The company’s domestic parks employed more than 100,000 before the pandemic, but that doesn’t include the cruise line and other divisions. Its workforce totalled 223,000 at its last fiscal year ended September 2019. — AFP/Bloomberg