Walt Disney Co (NYSE:DIS) has increased its planned job cuts to 32,000 workers, up from the 28,000 announced in September, as the coronavirus pandemic caused a sharp drop off of customers at its theme parks.
In a filing on Wednesday, the house of mouse said the redundancies will occur in the first half of next year, adding that as of October 3 it has around 37,000 employees on furlough as a result of the pandemic’s impact on the business.
This followed news earlier this month that the firm had furloughed additional workers at its theme parks in California amid uncertainty that the state government would allow the parks to reopen.
Disney’s park in France has also had to close its doors again amid a second wave of infections in the country, although its parks in Shanghai, Hong Kong and Tokyo are still open.
‘’Theme parks have long been the jewel in Disney’s crown, but Covid-19 has proved a nightmare for the entertainment empire with a fairytale ending not yet in sight”, said Susannah Streeter at Hargreaves Lansdown.
“[Disney’s] parks business has fallen from a US$6.8bn profit in 2019, to an US$81mln loss this year, and sales are continuing to slide. With Covid-19 cases still spiking in parts of the US and Europe, Disneyland in California is still closed and Disneyland Paris will remain shut until mid-February, losing the custom of the key Christmas season. While a vaccine might accelerate a return to normal in the parks business, it’s still likely to take months and possibly years before business is back to where it once was”, she added.
In its fourth quarter results two weeks ago, Disney reported an adjusted loss per share of US$0.20, better than forecasts for a US$0.73 loss but swinging from a US$1.07 profit last year. Revenues meanwhile, stood at US$14.71bn, above estimates of US$14.2bn but down from US$19.1bn a year ago.
The company blamed the loss on the closure of its theme parks due to the pandemic as well as the shuttering of global theatres affecting its studio and media businesses. Disney has estimated that the total cost of the pandemic for its 2021 financial year could run to around US$1bn.
The one bright spot was the company's recently launched streaming service, Disney+, which brought in 73.7mln subscribers at the end of the quarter, above estimates of 65.5mln.