Why More Disney Layoffs? One Economist Weighs In
While many around the country are enjoying a socially-distanced holiday, many Disney employees are no doubt sweating it out.
With 28,000 layoffs already announced, on Wednesday The Walt Disney Company released an SEC filing, which added 4,000 more.
One Florida news outlet wanted to figure out why, after such a substantial layoff, would Disney need to cut more jobs? So they asked an economist.
“We already have thousands of workers that are laid-off, here in Orlando,” said Sean Snaith, Director of the Institute for Economic Forecasting, University of Central Florida (UCF). “There’s no indication, what the breakdown is of who the newly-announced layoffs will impact.”
He hopes none are from Disney World, adding that “one more is too much to add to that list of people, who by in large are from lower-income households, They’re really taking the brunt of this.”
Snaith said the additional layoffs are likely caused “as new data comes in. Companies have to make adjustments in light of that… They made those moves early on, I’m sure based on some assumptions and prediction of where things would be going over the next few months. And when those predictions didn’t pan out, as the data came in, then they needed to revisit.”
Certainly, Disney seemed to predict a return to operations for Disneyland. But that did not happen. Nor did Disney Cruise Line or the vast majority of movie theaters.
“A lot of their business segments, really depend on gatherings of large crowds, you know whether it’s in movie theaters, or theme parks or sporting events and so all of these have taken a hit,” Snaith explained.
Meanwhile, CNBC.com’s Sarah Whitten further clarified the numbers:
- Disney will layoff 32,000 employees in the first half of fiscal 2021.
- This figure includes the 28,000 workers that the company previously announced in September.
- In addition, as of Oct. 3, around 37,000 employees who were not expected to be laid off were placed on furlough.
Earlier this month, Disney said the Covid-19 outbreak cost its parks, experiences, and products segment around $2.4 billion in lost operating income during its fiscal fourth quarter. The segment saw revenue fall 61% to $2.6 billion.
In the meantime, check out this video, which includes a discussion of Disney’s bottom line, recent layoffs, and the future.