Disney plans to discontinue paying 100,000 employees as a measure to save on cost

WHAT YOU NEED TO KNOW:

• To save on expenses, Disney is to stop its payments to its 100,000 employees amidst the coronavirus crisis.
• Disney began shutting down its theme parks and hotels in the U.S and Europe nearly five weeks ago.
• Several executives of the entertainment giant have forfeited what remained of their base salary during the coronavirus epidemic. 

Financial Times reported on Sunday that Disney is to end their payment to around 100,000 employees starting this week as a means to save.

Disney, considered as the leading entertainment company in the whole world, anticipates a savings of up to $500 million a month since it started closing down its hotels and theme parks both in Europe and the U.S. as early as five weeks ago.

The move made Disney the leading company which implemented the highest economical measures as compared to other similar enterprises such as Warner Media and NBC Universal.

The Times reported that Disney’s move would mean that its workers would now start to depend on state-provided economic packages for support as the company saves bonuses for its executive and up to $1.5 billion dividend outflows.

Disney is to continue the provision of full healthcare benefits to employees who took unpaid leaves.

Estimates suggest that Disney generated at least $7 billion last year from its products and services, such as theme parks, merchandise, and experiences, which comprises close to half of its operating revenues.

Since the coronavirus started, the entertainment conglomerate’s shares have diminished to about a quarter.

For supplementary financial support, Disney told its staff to file for federal relief of an added $600 a week, which is provided through the new COVID-19 stimulus package.

Meanwhile, in Disneyland Paris, the majority of the 17,000 staff will be under France’s “partial activity scheme,” which means the firm is to halt salary payments.

As an aid to the employees, several executives of the media company has also waived their salaries during the outbreak. Among those who made the sacrifice are CEO Bob Chapek, who will not be receiving half of his $2.5 million wages, and   Executive Chairman Bob Iger, who waives his remaining salary of the $3 million yearly pay.

The Times reported that Chapek, who succeeded Iger weeks prior to the park closure,  could possibly receive a bonus of at least 300 percent of his remuneration, an incentive of long tenure at a minimum $15 million.

Disney primarily declared that workers would be laid off starting April 19.  Orlando Sentinel reported on April 12 that Disney World, particularly, was to let go of at least 43,000 union workers.

Source: The Hill