The Coronavirus Pandemic has crushed the entertainment / leisure / tourism business, and Disney has no doubt been one of the companies hit the hardest by the industry's sudden and unprecedented shutdown. While Disney has been losing a crazy amount of money everyday from their parks, movies, TV shows and merchandise no longer being readily available to the public, the Mouse House was also one of the first to jump in front of the disaster, cutting salaries of executive as high as CEO Bob Iger, in effort to keep employees paid during the quarantine lockdown period. However, it seems as though Disney's charity has now run out.
A new report in the Financial Times claims that Disney is about to stop paying more than 100,000 employees (approximately half its workforce) to help offset Coronavirus Pandemic losses. Analysts predict that the measure could save Disney up to $500 million per month in costs for its theme parks and hotels.
On the one hand, the measure seems to make sense financially, for Disney. In the United States, at least, Federal measures to provide economic stimulus in the form of direct payment to citizens is now underway. So Disney employees not getting money from the company could still get assistance from the federal money that's coming in, as well as joining millions of other Americans in trying for unemployment benefits (albeit in a system that's currently clogged beyond the brink.
On the other hand, this is a pretty troubling sign. Disney is one of (if not the) biggest company in the entertainment business, and even it is apparently unable to carry it employees through this storm, any longer. If even the biggest company doesn't have the resources to keep itself afloat without employee cost-cutting measures, what hope does any other business impacted by the Coronavirus have?
Just to emphasize how April 2020 has gone: here's the noble message that Disney sent to employees at the beginning of the month, touting the sacrifices of upper management to protect employees:3comments
"...we are going to be implementing a variety of necessary measures designed to better position us to weather these extraordinary challenges. Among them, we will be asking our senior executives to help shoulder the burden by taking a reduction in pay – effective April 5, all VPs will have their salaries reduced by 20%, SVPs by 25%, and EVPs and above by 30%. I will be taking a 50% reduction in my salary. This temporary action will remain in effect until we foresee a substantive recovery in our business. Our executive chairman, Bob Iger, has chosen to forgo 100% of his salary."
Hopefully Disney will get back on its feet (SAFELY and PROPERLY) so that these thousands of employees can get back to their livelihood.
Disclosure: ComicBook is owned by CBS Interactive, a division of ViacomCBS.