The furloughs will save company up to $500 million a month and go in effect as the parks and hotels have been closed for five weeks.
The Magic Kingdom has become a little less magical.
To preserve scheduled executive bonused and a $1.5 billion dividend payout to its shareholders, the Disney corporation has furloughed 100,000 cast members from their parks and hotel operations. The parks have been closed for the past five weeks and the furloughs will save the company $500 million a month. However, those costs will be paid by the taxpayers as the furloughed workers go on government assistance. By contrast, some big multinationals, including L’Oreal and Total in France, have vowed to forgo state aid in a show of solidarity with taxpayers.
“They could afford” not to furlough staff, said Rich Greenfield, analyst at BTIG, told The Times, especially after raising the debt and signing new credit facilities. However, Greenfield says that the company is preparing for a long shut down. Disney made $7 billion in operating income from its parks and products.
Here is Disney's full statement:
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.