Disney to furlough workers 'whose jobs aren't necessary' starting April 19

AP Photo/John Raoux

Magic Kingdom at Disney World resort in January, 2020.

• The Walt Disney Company announced on Thursday that it would furlough employees "whose jobs aren't necessary at this time" beginning on April 19.
• "The COVID-19 pandemic is having a devastating impact on our world with untold suffering and loss, and has required all of us to make sacrifices," the company said.
• According to the company, those impacted by the measure will remain Disney employees with full healthcare benefits.
• Disney did not specify how many workers will be furloughed and it's unclear whether union workers will be impacted by the measure.
• Visit Business Insider's homepage for more stories.

The Walt Disney Company announced on Thursday that it would furlough employees "whose jobs aren't necessary at this time" beginning on April 19.

Disneyland, the California theme park that sees an average of 50,000 visitors per day, shut down operations on March 12. Disney shut down all of its parks around the globe as of March 16 and has since extended the closures of its US parks indefinitely.

On Thursday, Disney announced in a statement that it would be forced to furlough some employees due to the economic impact of the novel coronavirus pandemic on the parks.

"The COVID-19 pandemic is having a devastating impact on our world with untold suffering and loss, and has required all of us to make sacrifices," the company said.

"Over the last few weeks, mandatory decrees from government officials have shut down a majority of our businesses. Disney employees have received full pay and benefits during this time, and we've committed to paying them through April 18, for a total of five additional weeks of compensation. However, with no clear indication of when we can restart our businesses, we're forced to make the difficult decision to take the next step and furlough employees whose jobs aren't necessary at this time," the company continued.

According to Disney, the furlough process will begin on April 19, and those impacted by the measure will remain Disney employees with full healthcare benefits. The cost of employee and company premiums will continue to be paid for by Disney, and those enrolled in Disney Aspire will have continued access to the education program.

"Additionally, employees with available paid time off can elect to use some or all of it at the start of the furlough period and, once furloughed, they are eligible to receive an extra $600 per week in federal compensation through the $2 trillion economic stimulus bill, as well as state unemployment insurance," the statement added.

Over 100,000 people work at Disney's parks, including some 31,000 at Disneyland and some 75,000 at Walt Disney World. According to Forbes, the Walt Disney Company employs about 201,000 people overall.

Christopher Duarte, President of Workers United Local 50, which represents about 8,000 Disney employees in the food service industry in California, told Business Insider that it is unclear how this announcement would impact union workers.

"From what I've been able to gather, the statement that was made was regarding non-union employees," he said. "We're going to have to speak to Disney tonight or tomorrow to understand what is going to happen to union employees."

Representatives for Disney did not immediately respond to Business Insider about how many workers will be impacted.

Analysts have predicted that Disney stands to lose millions due to closures of its US parks and resorts. According to UBS, the company could lose $13 million per day, and may take a nearly $2 billion revenue hit in 2020.

But despite a grim economic outlook, parks were forced to close as many US states, including Florida and California, have closed non-essential businesses and banned large social gatherings to curb the coronavirus spread. The US has reported over 244,000 cases and over 5,000 deaths so far.

But experts say that the economic loss from closing parks may be better than the long-term loss associated with a potential outbreak at the park.

"They have more to lose from a real crisis," Dennis Spiegel, Founder and CEO of International Theme Park Services, told Forbes.

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