Disney To Let Go 28,000 Theme Park Workers As Pandemic Forces 'Difficult Decisions'

Walt Disney Co DIS theme parks are still dealing with the impact of lockdown and the company is forced to slash around 28,000 jobs, it said in an internal memo accessed by CNBC.

Josh D’Amaro, head of parks at Disney, in the memo said that approximately two-thirds of the layoffs would include part-time employees, and dubbed it a “difficult decision,” CNBC reported.

What Happened: The outbreak and lockdown measures have put a dent in Disney's key revenue segment. The entertainment giant has taken measures to control expenses and suspended capital projects, D'Amaro said. According to the New York Times, although the theme parks will witness most of the job cuts, Disney’s cruise line and retail stores will also face the brunt.

The theme parks in Florida, Shanghai, Japan, and Hong Kong are all operating as of this month, according to CNBC.

Why Does It Matter: In 2019, Disney’s theme park revenues contributed approximately $69.6 billion, which was 37% of its total revenues. For two quarters in a row, Disney reported a significant loss of revenue. In the second quarter, the company reported $1 billion as loss of operating income which increased to $3.5 billion in the third quarter. Disney reported an 85% revenue drop in the latest quarter with a net loss of $3.5 billion for the theme parks business.

Price Action: After a 0.47% drop during trading hours, Disney stock further slid 1.32% during after-hours at $123.75 per share.