Walt Disney said Thursday that it has made the “difficult” decision to furlough employees “whose jobs aren’t necessary at this time” after April 18 due to the economic hit from the coronavirus and uncertainties as to when large chunks of its business will be operational again.
Disney’s statement (below) didn’t specify the number of employees or divisions. We understand that the furlough process started with the Parks division and that other lines of business are in still in the process of determining the neccesary furloughs.
Disney had committed to paying employees full pay and benefits through April 18. The statement today from a Walt Disney spokesperson said those impacted by the furlough process will remain Disney employees throughout the duration of the furlough period and receive full healthcare benefits, with Disney picking up the cost of employee and company premiums.
An internal memo sent specifically to employees of Parks, Experiences and Products (also below) said the furlough would apply to “executive, salaried and non-union hourly Cast Members based in the U.S. with the exception of those whose roles or projects are crucial to maintaining our operations during this closure period, effective April 19.”
We understand that the furlough process started with the parks divison and that other lines of business are still in the process of determining the necessary furloughs.
Disney had 223,000 employees worldwide as of our latest fiscal year-end.
Last Friday, executive chairman Bob Iger said he would forgo his salary completely and CEO Bob Chapek would see his cut by 50%. Across the conglomerate, VP, SVPs and EVPs will have compensation reductions of, respectively, 20%, 25% and 30%.
As the global pandemic forces social distancing and people to shelter in place, Disney’s theme parks are closed, and most film and television production halted. Like all media companies, it’s taking a hit from lower advertising. It has raised a $6 billion cushion to see it through what’s become a very steep and sudden economic downturn.
Earlier today, the Department of Labor reported that unemployment claims soared to an unheard of 6.65 million for the week ended March 28. California had the highest number of claims with 878,727. That followed 3.307 million claims filed the previous week, brings total U.S. claims to nearly 10 million in two weeks.
The Disney Parks, Experiences and Products – which makes up close to 40% of annual revenue – has a staff of about 177,000 but it’s not clear how many would be impacted.
STATEMENT FROM THE WALT DISNEY COMPANY REGARDING CORONAVIRUS IMPACT
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. Over the last few weeks, mandatory decrees from government officials have shut down a majority of our businesses. 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. 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 furlough process will begin on April 19, and all impacted workers will remain Disney employees through the duration of the furlough period. They will receive full healthcare benefits, plus the cost of employee and company premiums will be paid by Disney, and those enrolled in Disney Aspire will have continued access to the education program. Additionally, employees with available paid time off can elect to use some or all of it at the start of the furlough period and, once furloughed, they are eligible to receive an extra $600 per week in federal compensation through the $2 trillion economic stimulus bill, as well as state unemployment insurance.
Letter to Disney Parks, Experiences and Products (DPEP) Executives, Salaried and Non-Union Hourly Cast
Dear Cast Members and Imagineers:
As you know, over the past several weeks, COVID-19 has completely reshaped our daily lives as well as our business. A new chapter in the history of our company began when we closed our theme parks, hotels, stores and other operations to help lead the effort to stop the spread of COVID-19. This reality has been sobering to all of us. As difficult as this decision was, we know it was the right one to help protect our Cast Members, our Guests and our communities.
True to the core of Disney, it is heartwarming to see many of you continuing to show your compassion, creativity and support for each other over the past few weeks. The acts of kindness and joy we’ve seen our Cast sharing have been inspirational. We appreciate all you do and know that our Cast Members will always be the heart and soul of Disney. This is why some of the choices we must make are extremely difficult.
At DPEP, as we look ahead, we must make tough decisions about the impacts of the extended closure, and are doing so with two priorities in mind:
- Caring for our Cast Members:As a company and a leadership team, our focus now is on how best to care for our Cast Members – including keeping you safe, protecting your benefits, and preserving your job for the future.
- Protecting the future of Disney: As we navigate an extraordinarily challenging business climate, we want to best position our company to weather this crisis.
With the utmost care and consideration, we are instituting a temporary, short-term furlough for executive, salaried and non-union hourly Cast Members based in the U.S. with the exception of those whose roles or projects are crucial to maintaining our operations during this closure period, effective April 19.
By taking this step now, we are able to allow Cast Members to:
- Maintain health and insurance benefits coverage, with the company paying both the employer and employee weekly benefit contributions;
- If eligible, elect to use some or all of their available paid-time off hours (vacation and floating holidays) at the start of the furlough;
- Once furloughed, access an extra $600 per week in federal compensation through the economic stimulus bill, as well as state unemployment insurance benefits;
- Continue progress toward their education goals with the Disney Aspire education program; and
- Use services provided by LifeCare, Employee Assistance Program and wellness resources.
And most important, this allows us to preserve the jobs of Cast Members who are, and will continue to be, an important part of the Disney family; and provide an easier return to work when our communities recover from the impact of COVID-19.
As part of our commitment to our collective bargaining agreements we will be setting up meetings today with the unions.
This certainly is one of the most difficult choices the company has ever faced. But we are committed to doing everything we can – even when the decisions are unimaginably hard – to help preserve jobs and help ensure that our Cast Members can return to their roles.
Early next week, your leaders will be reaching out to you. We know that nothing about this situation is easy and that we’re all facing different challenges in our lives right now. We hope that before long, we will all be able to come together, once again, as a stronger Disney family to create magic for our Guests.
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