Why is Disney laying off 28,000 theme park employees?

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Disney is laying off approximately 28,000 employees primarily due to the severe impact of the coronavirus pandemic on its US theme park operations.

Walt Disney Co announced a significant workforce reduction affecting around 28,000 employees, with the majority of these layoffs concentrated within its US theme parks. This decision stems directly from the profound disruption caused by the coronavirus pandemic, which has drastically curtailed attendance and operational capacity at these venues. Approximately two-thirds of the affected employees are part-time workers, reflecting the company's adjustment to reduced demand and operational scale.
Impact of the Coronavirus Pandemic on Park Operations

The coronavirus pandemic has fundamentally altered the landscape for Disney's theme parks, leading to reduced capacity and, in some cases, prolonged closures. Specifically, Disneyland in California has remained closed, a key factor contributing to the severity of the layoffs. While other parks globally have gradually reopened, they operate under strict limitations to ensure physical distancing, thereby impacting revenue streams.
Limited Capacity and Operational Uncertainty

Josh D'Amaro, chairman of Disney's parks unit, cited the ongoing necessity of operating with limited capacity as a primary driver for the workforce reduction. He also highlighted the uncertainty surrounding the duration of the pandemic, which makes long-term staffing decisions challenging. This situation has been further complicated by the state of California's restrictions, which have hindered Disneyland's ability to reopen and resume more normal operations.
Efforts to Mitigate Layoffs

Prior to this decision, Disney had implemented various measures to avoid layoffs, including cutting expenses, suspending projects, and streamlining operations. The company also continued to provide health benefits for furloughed workers since April. However, D'Amaro indicated that these measures were insufficient to sustain the existing staffing levels given the drastically reduced operational capacity.
Workforce Size Before the Pandemic

To provide context for the scale of the layoffs, Walt Disney World in Florida had employed 77,000 full- and part-time workers before the pandemic. Disneyland in California, prior to the pandemic, had a workforce of approximately 32,000 employees. The company did not specify the total number of US employees within its parks, experiences, and products segment, which also encompasses consumer products and cruise lines.

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Why is Disney laying off 28,000 theme park employees?

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