Disney announced Tuesday it is laying off 28,000 workers in the company’s California and Florida theme parks because of the “prolonged impact” of the coronavirus pandemic, CNN reports.
Disney’s parks and resorts division is taking the most cuts and has more than 100,000 US employees, according to CNN, 67% of the 28,000 laid off workers were part-time employees.
Disney’s theme parks shut down globally this spring as the pandemic hit and the company has been hemorrhaging money ever since. In the second quarter, the company reported a loss of $1 billion in operating income due to the closures. In the third quarter, the company reported a steeper loss of $3.5 billion.
Josh D’Amaro, the chairman of Disney Parks, called the decision “heartbreaking” but “the only feasible option” due to “the continued uncertainty regarding the duration of the pandemic.” That included “limited capacity due to physical distancing requirements and the continued uncertainty regarding the duration of the pandemic.”
“As difficult as this decision is today, we believe that the steps we are taking will enable us to emerge a more effective and efficient operation when we return to normal,” D’Amaro said in a statement.
D’Amaro and his team have been working to persuade California state legislators to provide guidelines for reopening parks after the success seen at its Florida parks as it began a phased reopening in July, and internationally in Paris, Shanghai, and Japan.
The Florida resort reopened with safety protocols and health measures that included reduced capacity at its parks and requiring all employees and guests to wear masks.
The financial losses were “exacerbated in California by the State’s unwillingness to lift restrictions that would allow Disneyland to reopen,” D’Amaro said.
Disney originally planned to reopen the resort located in Anaheim, California, on July 17, but that reopening was delayed indefinitely. The flagship resorts in California have been closed since March.
“As you can imagine, a decision of this magnitude is not easy,” D’Amaro wrote in a memo to employees that was obtained by CNN Business. “We’ve cut expenses, suspended capital projects, furloughed our cast members while still paying benefits, and modified our operations to run as efficiently as possible, however, we simply cannot responsibly stay fully staffed while operating at such limited capacity.”
Disney reported a loss of a billion dollars in profit just a few weeks into the global health crisis.