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Walt Disney Co. plans to lay off 32,000 employees, mostly at its theme parks, as the coronavirus continues to hit the entertainment company’s business hard.
Disney announced 28,000 job cuts in September and plans to end its employees’ contracts in the first half of fiscal 2021.
The company warned that it could take additional steps such as not declaring future dividends and reducing or failing to make certain payments, such as contributions to its pension and post-retirement medical plans.
The Covid-19 pandemic has severely affected many businesses around the world, as government lockdowns aimed at limiting the spread of the virus have led to the closure of amusement parks, cruise ships and movie theaters. The United States is among the worst affected by the pandemic and it is not known when the company will be able to reopen its Disneyland theme park in Anaheim, California, which has been closed since March.
In a filing Wednesday night, Disney said it was considering additional measures such as suspending capital spending, reducing investments in film and television content and implementing additional holidays.
“Some of these measures may have a negative impact on our business,” the company warned.
Disney earlier this month reported a second consecutive quarterly loss as the pandemic hit core businesses such as theme parks and movie distribution. However, the company’s direct-to-consumer activity appeared to be a bright spot: Disney + subscriptions reached 73.7 million as of October 3, up from the more than 60 million reported in August.
The growth of Disney + has prompted Disney to focus even more on its streaming efforts. The early success and potential growth of its streaming services has been encouraging on Wall Street, where Disney’s stock price has returned to pre-pandemic levels as subscriber numbers increase.
The company said it also plans to launch a general direct-to-consumer entertainment video streaming offering under the Star brand outside of the United States in 2021.
“With the unknown duration of Covid-19 and the time that remains to be determined for the gradual reopening of certain companies, it is not possible to precisely estimate the impact of Covid-19 on our operations in the coming quarters” , the company said.
Write to PR Venkat at [email protected]
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