Today marks the start of furloughs for employees of The Walt Disney Company. These furloughs include over 100,000 employees. This is about half of Disney’s employees.
This drastic action to cut costs for The Walt Disney Company is said to save approximately $500 million per month. This comes five weeks after all of its theme parks globally closed.
While furloughed, Disney employees will be eligible for state unemployment benefits. They can also benefit from the stimulus package from the federal government. On top of this, Disney will continue to cover their healthcare. Those enrolled in Disney Aspire will continue to have access to the education it offers.
While employees are being furloughed, Disney has also been raising cash through various debt and credit offerings. This will help continue to keep the company moving forward while the income is at a standstill. The Disney Parks generally bring in around $7 billion per year for the company. With the parks and other businesses closed, it is estimated that Disney is losing $30 million per day.
Executives at The Walt Disney Company have also taken pay cuts. At this time while their salaries have been reduced, their incentives are still being protected. It is unknown if executives will still receive their annual bonuses.
At this time, it is unknown when Disney will begin to reopen its businesses that have been closed due to the coronavirus pandemic. The bright spot for the company currently is Disney+. It was recently revealed that it had surpassed 50 million subscribers since launching in November.
All of this comes after Bob Iger has apparently stepped back in and taken a more active leadership role guiding Disney through this crisis and envisioning what the company will be like in the future. The future of The Walt Disney Company is unknown but the reality is that there will be significant hurdles for it to overcome.
DAPS MAGIC will continue to follow this story and offer updates as they become available.