Walt Disney Co. plans to lay off 32,000 employees, primarily in its theme parks, as the coronavirus continues to hit the entertainment company’s businesses hard.
Disney announced the elimination of 28,000 jobs in September and is expected to terminate its employees ’contracts in the first half of 2021.
The company has warned that it may take further action, such as not declaring future dividends or reducing or failing to make certain payments, such as contributions to its pensions and post-retirement medical plans.
The Covid-19 epidemic has severely affected many companies around the world as government locks to limit the spread of the virus have led to the closure of recreational parks, cruise ships and movie theaters. The U.S. is hit hardest by the pandemic, and it’s unclear when the company will be able to reopen its Disneyland theme park in Anaheim, California, which has been closed since March.
In a late Wednesday submission, Disney said it was considering additional measures, such as suspending capital spending, reducing investment in film and television content, and introducing additional measures.
“Some of these measures could adversely affect our business,” the company warned.
Disney announced a second consecutive quarterly loss earlier this month when the pandemic hit its core businesses, such as amusement parks and movie distribution. However, the company’s direct consumer business emerged as a bright spot: Disney + subscriptions reached 73.7 million on October 3, compared to more than 60 million announced in August.
The growth of Disney + has prompted Disney to put even more emphasis on its streaming efforts. The early success and potential growth of its streaming services has had an encouraging effect on Wall Street, where Disney’s price has returned to pre-pandemic levels as the number of subscribers increases.
The company has announced that in 2021, in addition to the United States, it will also launch a general entertainment video streaming offering directly to consumers under the Star brand.
“Due to the unknown duration of Covid-19 and the as yet indefinite timing of the intermittent reopening of individual businesses, it is not possible to accurately estimate the impact of Covid-19 on our operations in future quarters,” the company said.
Write to PR Venkat at [email protected]
