I’m afraid that this is just a sign of bad things to come at lots of other companies for lots of workers.
Disney (DIS), which had announced back in April that it would furlough more than 100,000 workers after the coronavirus pandemic forced the company to close down its theme parks, today announced that it would turn those furloughs into layoffs for 28,000 workers in the company’s parks experiences and products division that includes Disneyland in California, Walt Disney World in Florida, retail stores and four cruise ships. The segment employs 177,000 people. About two-thirds of the workers who will be laid off are part-time employees.
The difference between a furlough and a layoff is a big deal for workers. With a furlough employers continue to pay benefits such as health insurance. Laid off workers lose all company provided benefits. It’s likely that more companies will follow Disney’s path in the weeks ahead as the slump in revenue in sectors such as hospitality, tourism, and retail resulting from the coronavirus pandemic stretches into the fall.
In August, Disney reported a net loss of $4.72 billion for the quarter that ended in June. That was down from $1.43 billion in net income for the June quarter in 2019.. Excluding one-time items affecting profitability, Disney posted a profit of 8 cents a share, down 94% from the same period a year earlier. Disney is next expected to report quarterly earnings on November 5.
Today Disney shares closed down 1.05%.