Disney stops paying 100,000 employees worldwide to cut costs in coronavirus lockdowns
.jpg "Walt Disney Co. will cut pay this week to 100,000 employees on furlough, nearly half its workforce, to cut costs as coronavirus lockdowns keep theme parks shuttered.")
Hit by coronavirus lockdowns that have shuttered theme parks and canceled film premieres, Walt Disney Co. will stop paying 100,000 workers this week, the Financial Times reported.
The company expects to save $500 million a month from the move, which leaves nearly half its global workforce without pay, according to the publication.
Employees on unpaid leave will still receive full health benefits and can apply for benefits in the U.S. under the stimulus relief packages, the Financial Times reported..
“The COVID-19 pandemic is having a devastating impact on our world with untold suffering and loss, and has required all of us to make sacrifices,” the company said in an April 2 statement, The Motley Fool reported.
“Disney employees have received full pay and benefits during this time, and we’ve committed to paying them through April 18, for a total of five additional weeks of compensation,” the earlier statement read. “However, with no clear indication of when we can restart our businesses, we’re forced to make the difficult decision to take the next step and furlough employees whose jobs aren’t necessary at this time.”
The company shut down all of its theme parks, including the Disneyland and Walt Disney World resorts in the United States, on March 14. Walt Disney World alone employs 70,000 people, The Street reported.
No reopening dates for the U.S. theme parks have been announced.
The company still expects to pay a $1.5 billion dividend to shareholders in July, the Financial Times reported.
In March, Disney announced executive chairman Bob Iger will give up his salary while new CEO Bob Chapek will take a 50% cut to his base salary in response to the pandemic, according to Hollywood Reporter.
Disney stocks slipped Monday morning in trading after UBS and Credit Suisse analysts downgraded it to “neutral,” The Wrap reported. They had previously rated the stock as “buy” and “outperform,” respectively.
More than 2.4 million cases of the COVID-19 virus have been confirmed worldwide with more than 166,000 deaths as of April 20, according to Johns Hopkins University. The United States has more than 761,000 confirmed cases with more than 40,000 deaths.
The World Health Organization has declared the COVID-19 virus a global pandemic. In the United States, President Donald Trump has declared a national emergency.