KEY POINTS

  • Disney will lay off over 28,000 employees in the United States
  • At least 67% of people affected by the decision are part-time workers
  • The layoff will affect workers in Disney's Parks, Experiences, and Products Unit

The Walt Disney Company on Tuesday announced its decision to lay off over 28,000 people in the United States as the coronavirus pandemic forced its theme park business to prolong closures and limit attendance. 

In a memo sent to employees, Josh D’Amaro, head of parks at Disney, cited several “difficult decisions” that the company had to make, including laying off thousands of employees in its Parks, Experiences, and Products Unit. According to CNN, 67% of the people who will lose their jobs are part-time workers. 

D’Amaro added that their employees have “been the key to success” and said they would provide opportunities where they can. The Parks, Experiences, and Products Unit accounted for 37% of Disney’s $69.6 billion total revenue in 2019. 

“As you can imagine, a decision of this magnitude is not easy,” D’Amaro wrote in the memo to employees obtained by CNBC. “For the last several months, our management team has worked tirelessly to avoid having to separate anyone from the company. 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’s theme parks shut down worldwide as COVID-19 hit several nations. The company’s profit dropped by 91% during the first quarter of 2020. Between April through June, the Walt Disney Company reported a loss of $1 billion in operating income. In the third quarter, it recorded a loss of $3.5 billion.

D’Amaro partially blamed the state of California for its "unwillingness" to lift restrictions to allow the theme park to reopen Disney and California Adventure. Its flagship resorts in California have been closed since March. 

Disney originally planned to reopen its resort in California on July 17. However, it was delayed indefinitely. D’Amaro and his team have been working to persuade lawmakers in the state to provide them safety guidelines for reopening parks. 

Last week, the company provided a media update where they highlighted the success seen at its parks in Florida, Paris, Shanghai, and Japan. It also features the safety measures it has taken, which include requiring face masks, placing sanitation stations, and cashless payments.  The job cuts were needed in light of social distancing requirements, exacerbated by tough restrictions imposed by the California state government, Disney said The job cuts were needed in light of social distancing requirements, exacerbated by tough restrictions imposed by the California state government, Disney said Photo: GETTY IMAGES NORTH AMERICA / Octavio Jones