• Sun. Dec 11th, 2022

COVID-19 has caused Disney’s income from its cruises, hotels, and theme parks to dive. Future profitability depends on demand for out-of-home events.

Nov 26, 2020

Disney plans to lay off about 32,000 people in the first half of 2021.
In a filing with the US Securities and Exchange Commission on Wednesday, The Walt Disney Company said it would terminate the employment of “approximately 32,000 employees,” primarily at its parks, Variety first reported.
The number includes Disney Parks’ September announcement that 28,000 employees — around two-thirds of whom were part-time employees — would be laid off, Variety confirmed.
“Due to the current climate, including COVID-19 impacts, and changing environment in which we are operating, the company has generated efficiencies in its staffing, including limiting hiring to critical business roles, furloughs, and reductions-in-force,” the company said in the SEC filing.
“As part of these actions, the employment of approximately 32,000 employees primarily at Parks, Experiences and Products will terminate in the first half of fiscal 2021,” it said.
As Business Insider previously reported, Disney’s theme parks division lost $2 billion in operating income in the quarter to June, making it the hardest-hit segment of the company.
The parks, including Florida’s Walt Disney World and California’s Disneyland, were forced to close at the start of the pandemic. Some were only beginning to slowly reopen over the summer, while others, like Disneyland in California, remain shuttered or have closed again.
The pain of the pandemic at Disney extends beyond its parks. The filing also referenced the temporary closure of its retail stores, the docking of its cruise ships, and the suspension of its stage plays.
Disney also had to halt television and film production for most of the year, and when it started filming again the process was both slower and more expensive due to COVID-19 safety measures, according to the filing.
And because of the temporary closure of cinemas, Disney has also brought some titles, such as “Mulan,” straight to streaming, and delayed the theatrical release of others.
This lack of new releases meant the company had fewer opportunities to generate income from merchandise, the filing said, and also caused its ad sales to drop.
“Collectively, our impacted businesses have historically been the source of the majority of our revenue,” the company said.
Disney also warned that its income may continue to fall even after its operations restart because “the economic downturn caused by COVID-19” could cause customers to spend less money on its goods and services.
The revenue Disney makes from its theme parks, resorts, cruise ships, experiences, and theatrical releases also depends on how quickly demand for public and out-of-home entertainment experiences returns after the pandemic, it warned.
It also expects higher incremental costs associated with introducing health and safety measures, reopening its parks, and restarting halted construction projects, it said.
The entertainment company’s operating income in the year to September 30 was $8.12 billion, a 45% drop year-on-year.
Revenue from its parks, experiences, and products division was down almost $7 billion compared to last year, and it sold roughly half as many theme park tickets.
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