Major layoffs have become the norm for many companies around the world. Some of the industries worst affected by the pandemic and requiring the most in terms of layoffs have been the travel and tourism industries. In particular, airlines have announced tens of thousands, if not hundreds of thousands in combined layoffs over the past few months. Another company that’s announcing major layoffs is Disney (NYSE: DIS), which said as many as 28,000 workers on its Disneyland parks around the world would be losing their jobs.
The company went on to say that it expects its Disneyland resorts to remain closed for quite a long time. Most of these employees have already been furloughed since April, able to collect health benefits while they are away, but no actual salary. Most of these, however, are part-time workers.
The announcement came after health officials from California said they would not be lifting restrictions allowing Disneyland to open once again. More specifically, officials from Orange Country said that Disney’s flagship theme park didn’t meet the healthcare guidelines necessary to prevent further COVID-19 outbreaks.
“We know that a number of Californians are eager and wondering when [guidance on theme parks] is coming. We’re working with those industries to put out something that’s thoughtful,” said Mark Ghaly, secretary of the California Health and Human Services Agency in an official statement.
Despite promises to reopen sometime in mid-July, Disney has failed to open up its Disneyland parks. Considering how many jobs are dependent on these theme parks, some estimates putting it as many as 80,000, it has become a hot issue among local communities that rely on these jobs. On Monday, 20 separate California legislators issued a letter to the state’s governor, urging him to reopen these parks precisely for this issue.
Disney said that it lost around $4.7 billion in the three months ending in June, the first quarterly decline reported by the company in almost 24 years. In comparison, Disney had a $1.4 billion profit during the same quarter last year.
Shares of Disney ended up falling around 4% in after-hours trading in response to the news. Disney has been one of the few large-cap stocks that have done exceptionally well for themselves over the course of the pandemic. Over the past few weeks, however, shares have ended up dipping a little. Among other reasons, the disappointing performance of its much-anticipated Mulan movie and the subsequent controversies have pushed down Disney’s stock price fall around 10% in September.
Disney Company Profile
The Walt Disney Co owns the rights to some of the most globally recognized characters, from Mickey Mouse to Luke Skywalker. These characters and others are featured in several Disney theme parks around the world. Disney makes live-action and animated films under studios such as Pixar, Marvel, and Lucasfilm and also operates media networks including ESPN and several TV production studios. Disney recently reorganized into four segments with one new segment: direct-to-consumer and international. The new segment includes the two announced OTT offerings, ESPN+ and the Disney SVOD service. The plan also combines two segments, parks and resorts and consumer products, into one. The media networks group contains the U.S. cable channels and ABC. The studio segment holds the movie production assets. – Warrior Trading News
