Disney’s Furloughing of Employees Is Expected To Save The Company $500 Million
It is with a heavy heart that we here at MickeyBlog have reported over the last few weeks about the furloughing of employees spanning nearly all aspects of the Walt Disney Company including theme parks, film studios and stores. Unions spent much of early April negotiating with Disney to secure health insurance and other benefits to its members in the light of lengthy COVID-19 closures.
Today, NBC Los Angeles revealed some figures, showing us exactly how much Disney is hoping to save by furloughing employees until the virus has passed and theme parks are ready to re-open.
According to the NBC report, suspending pay for thousands of cast members across the theme parks and hotels is expected to save the company somewhere near $500 million dollars. However, this is offset by the massive amount of revenue Disney is losing across all parks, retail outlets, film production studios and in advertising.
Employees were officially furloughed beginning yesterday (April 19th) which comes on the heels of the theme parks being closed for nearly five weeks. As a result, Disney employees are expected to collect unemployment. At a management level, Iger announced earlier this Spring that he would not take his annual salary. Chapek, who stepped into the role of CEO in February, also announced that he would be taking a 50% pay cut and all VP executives are receiving a wage reduction of 20-30%. However, it should be noted that executive-bonus schemes are protected and not included in the pay cuts.
The furloughing of employees is just one of many steps Disney is taking to protect its financial future. Over the past month, as NBC points out Disney has raised debt and signed new credit offers with lenders. This leaves the company with about $20 billion in cash to get it through the pandemic.
To put this in perspective, last year, Disney made about $7 billion in operating income from park experiences, products and businesses.
This is a story that we’ll continue to follow along closely at MickeyBlog. Keep checking back for further news and updates.
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Source: NBC Los Angeles