Job losses at Disney have reached 32,000, as the entertainment firm reveals 4,000 more employees are to be made redundant.
The entertainment giant has said that it plans to axe a total of 32,000 staff in the first half of next year, more than the 28,000 it announced in September, as it continues to struggle through the Covid-19 pandemic.
The job cuts primarily include employees from its theme parks in the US, which have suffered immensely in recent months. While it has been able to re-open its larger Florida operation, rides and attractions in California have been shut since March. Those which have reopened are subject to strict social distancing rules that limit attendance.
Disney has been hit hard by lockdown measures
Disney’s financial results published on November 12, 2020 revealed that it had plunged into a debt of $2.8bn (£2.1bn) for the year to 3 October. Revenue fell by 23% in Q4 and by 6% overall for the year.
The parks, experiences and products segment has been most severely hit due to widespread closures. For its 2020 financial year, Disney has seen revenue from its parks, experiences and products segment tumble by 37%, while losses from the segment amounted to $81m, highlighting the impact that lockdown restrictions are having on the company as a whole.
Disney saw revenue from its parks, experiences and products segment grow by 9% in the first quarter of its 2020 financial year (October-December 2019), which shows just how hard this segment has been hit by the pandemic.
Financial pressures on the company have not been limited to theme parks, another traditional business which has struggled is the entertainment segment.
The box office around the world has stalled amid the pandemic, leading to 13% yearly loss in Disney’s studio entertainment division. According to Box Office Mojo, the box office in the US and Canada has declined by over 79% between January 1 and November 17 2020, compared to the same period last year, which has taken its toll on Disney.
Disney actually began its financial year in a strong position, with revenue from its studio entertainment division growing by over 200% in Q1 (October-December) compared to the same period last year.
Streaming has been Disney’s saving grace
While the detrimental impact that the pandemic has had on its traditional businesses has been detrimental, the company’s streaming platforms, and Disney+ in particular, have seen a surge in demand which has helped buoy the company through these tough conditions.
As the company reported revenue decline overall for its 2020 financial year, the streaming segment (Direct-to-Consumer & International) saw a staggering 81% growth. Disney+ has grown its subscriber base from zero at the beginning of the financial year, to 73.7 million by October 3, 2020.
It is clear to see that Disney’s decision to launch Disney+ has been crucial in supporting its survival through the pandemic.