Disney Parks announced in September that it would lay off 28,000 employees, two-thirds of them part-time employees, as a result of the epidemic’s impact on Disneyland and Walt Disney World. In a 10-K filing of the Walt Disney Company published the afternoon before Thanksgiving, Disney revealed whether it looks like an updated figure, which includes thousands more layoffs in its parks, experiences and products section.
“Due to the current environment, including the COVID-19 effects, and the changing environment in which we operate, the company has also generated the efficiency of its employees, including the implementation limitations in critical business roles, furloughs and reductions.” As part of these actions, the employment of approximately 32,000 employees will be completed in the first half of FY2021, primarily on parks, experiences and products. “
A Disney spokesman confirmed that the figures include scattered parks previously announced. Separately, from October, 000 employees, 000 Disney employees who are not ready to end.
It’s no secret that the coronavirus epidemic has hit the entire entertainment industry hard. In particular, Disney has made inroads into its many different businesses, considering its leadership position on many office fees, its vast media networks business and of course Disney Parks and resorts around the world.
Entertainment Titan details most of its financial woes in its fourth-quarter earnings report, which grew 23% year-on-year to .7 14.7 billion and boosted the company to a loss of $ 710 million (despite beating Wall Street forecasts). Is.). For fiscal year, the ongoing COVID-19 crisis has had the opposite effect on the company, which had a net loss of 2020 7.4 billion in fiscal year 2020.
Although many of the effects of the epidemic have already been well documented, 10-KA details in a number of ways the difficulties that the epidemic has posed to the company.
These include limited closures (and reduced capacity resumes) of Anaheim, Disneyland in California, Walt Disney World, Disneyland Shanghai and other resorts from mid-March. Disney’s fleet of cruise ships has been docked since the end of Q2, and retail stores have been closed for months. Television and film production was stable for most of this year. With movie theaters closing, the company has canceled theatrical releases and shipped some titles, such as Mulan’s live-rebound reboot, directly to its Disney Plus streaming service instead.
Disney said in the SEC filing that these mangled theatrical projects have resulted in hits in its advertising sales and commercial licensing business.
“The Covid-19 effects on our media network industries could also accelerate the erosion of our historical revenue sources,” the company said.
With many live sports canceled and TV production delays, Disney’s TV network – which includes ABC and ESPN – has seen a decline in viewership and advertising revenue, as well as “demands to reduce ancillary fees related to some of our television networks.” The company has continued to pay for some sports rights, including delayed or canceled events. Pay-TV packages have experienced an “accelerated decline” during epidemics.
Although TV and film production has slowly begun to back up, Disney has “spent money implementing health and safety measures and production will usually take longer to complete.” And getting the theme park back in gear doesn’t guarantee attendance. Disney’s parks and resorts reopened, the company said.
The impact of the crisis on consumers and business owners is also being felt, as some renters fall behind and begin to tighten their wallets.
The filing reads, “We have waived rent to some of our tenants, and they have not paid rent when some of our facilities have been closed.” “We have experienced customer requests for returns and refunds and payment defaults. Collectively, our affected businesses have historically been the source of most of our income. “
Disney expects the financial toll of the coronavirus epidemic to extend very low until its fiscal year 2021.
As many corporate companies struggle to contain the effects of the epidemic on its balance sheets, Disney noted in its 10-K that in financial influences, its debt rating has been downgraded – and may be further downgraded in the future – as a result. It may also have to resort to all sorts of methods to reduce its costs, such as cutting back on film and TV content investments. In April, the company struck an additional 5 5 billion in credit agreements and noted during its Q4 earnings that it would cover a half-yearly dividend later in the year.
“We may take additional mitigation measures in the future, such as increasing additional lending; Not declaring future dividends; Reducing or not making certain payments, such as some contributions to our pension and posttreatment medical plan; To further defer capital expenditures, reducing investments in film and television content; Or implementing additional furloughs or enforcement, ”Disney said.
Nonetheless, despite all that, investors are showing a relative uptick on Disney, as the company emphasizes its streaming efforts and reorganizes its corporate structures to focus on the digital-first future. (See: Disney Plus Market has 73..3 million paid subscribers in its first year in the market.) The company’s shares are trading at pre-epidemic levels, and Chief Executive Bob Chappeck’s Q. The earnings report showed a rebound.
“Despite the disruption caused by Covid-1, we have been able to effectively manage our businesses, while taking bold, deliberate steps to keep our company in place for long-term growth,” he said.
