Disney Says It Will Lay Off About 32,000 Employees In 2021
Media and entertainment giant Walt Disney Co (NYSE: DIS) confirmed in a regulatory filing update that approximately 32,000 employees will lose their jobs in the first half of 2021.
What Happened: Disney's job cuts will mostly impact employees in its Parks, Experiences and Products business units, the company said. The COVID-19 pandemic has disrupted a business unit that relies on tens of thousands of customers visiting its theme parks on a daily basis.
Disney's theme park in California, Disneyland, is not expected to reopen until at least 2021.
Related Link: 2 Catalysts That Could Boost Disney+ Subscribers
A "changing environment" resulted in management generating efficiencies in staffing, including limiting hiring to critical business roles, furloughs and reductions-in-force, according to the Mouse.
As of Oct. 3, approximately 37,000 employees who were not scheduled for employment termination were on furlough due to the negative effects of the pandemic, the company said.
Why It's Important: Disney's actions prompted it to suspend its semi-annual dividend in January, as management is using the funds to support its streaming video department instead.
Disney also cautioned investors that it may not declare future dividends moving forward.
What's Next: Disney said it will take additional "mitigation actions in the future," including raising additional financing, suspending capital spending, reducing film and TV content investments, enacting additional furloughs or further job cuts.
"Some of these measures may have an adverse impact on our businesses," the company said.
DIS Price Action: Disney shares were down 0.94% at $147.69 at last check Friday.
Photo courtesy of Disney.
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