Market Overview

Disney World To Furlough 43,000 Union Workers Due To Coronavirus Pandemic

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Disney World To Furlough 43,000 Union Workers Due To Coronavirus Pandemic

The Walt Disney Company's (NYSE: DIS) subsidiary Walt Disney World Resort is set to furlough 43,000 union workers starting April 19 due to the novel coronavirus (COVID-19) pandemic, CNBC reported Sunday.

What Happened

The move comes as the company reached an agreement with the Services Trades Council Union of the Disney World workers.

According to the agreement, Disney World will continue to cover the entire health insurance costs for the workers currently insured during the furlough for up to 12 months. The workers won't be required to pay back the costs after returning to work.

"We are pleased to have reached an agreement with the Service Trades Council Union that will maintain members' health insurance benefits coverage, educational support and additional employee assistance programs during a temporary furlough effective April 19," Walt Disney said in a statement to CNBC.

"This agreement provides an easier return to work when our community recovers from the impact of COVID-19. We are grateful to have worked together in good faith to help our Cast Members navigate these unprecedented times."

Disney told CNBC that about 200 workers would continue to work to maintain basic operations during the lockdown. All of the Disney theme parks across the globe are shut down to curb the spread of the coronavirus.

Why It Matters

Earlier this month, Disney announced it was furloughing some of the non-unionized workers and would stop collecting pay for its annual passes.

The theme parks make up for a significant chunk of Disney's revenue, with the Parks, Experiences, and Products subsidiary accounting for 37% of the entire company revenue in 2019 at $69.6 billion, according to CNBC.

Disney is not the only company to take extreme measures to minimize costs during the pandemic, as companies across sectors are similarly affected.

Marriott International Inc. (NASDAQ: MAR) and Seaworld Entertainment Inc. (NYSE: SEAS) previously announced that they were furloughing a majority of their employees.

Price Action

Disney's shares closed 3.4% higher at $104.5 on Thursday. The shares traded another 0.1% higher at $105.5 in the after-hours session.

 

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Posted-In: CNBC Coronavirus Union Walt Disney World ResortNews Management Media Best of Benzinga

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