The corona crisis paralyzed Disney’s California-based theme parks – now there are layoffs on a large scale. Because the business with amusement parks, holiday resorts and cruises is still suffering from the pandemic, the company will have to lay off around 28,000 employees, according to Disney.
And California Gov. Gavin Newsom is to blame.
In a memo to the workforce, division boss Josh D’Amaro described the decision as “heartbreaking”, but given the difficult circumstances caused by the Covid crisis, there was no alternative. The step is necessary, among other things because Corona requirements in California still do not allow the Disneyland there to reopen.
Disney’s COVID-19 woes have been “exacerbated in California by the State’s unwillingness to lift restrictions that would allow Disneyland to reopen,” -said Josh D’Amaro, the chairman of Disney (DIS) Parks
The job cut is hitting the division that has been hit hardest by the aftermath of the pandemic. In the three months to the end of June, a corporate loss was $ 4.7 billion. Revenues fell 42 percent year-on-year to $ 11.8 billion.
Business with amusement parks, holiday resorts and cruises suffered particularly badly. Sales fell by 85 percent, the operating loss was just under $2 billion after a profit of $1.7 billion in the previous year.
DIS stock lost more than 3% of its value in the after-hours trading session on Tuesday. It is expected that this announcement will not harm the stock value further as investors are looking into entire Disney portfolio. Disney Plus has been a strong growth catalyst during 2020 for Disney shares and it is expected to stay this way.