The company did not say how many of the affected employees worked at the Anaheim theme park and how many worked at Disney World in Florida.
Disneyland remains closed per state COVID-19 guidelines, but Disney and Orange County officials have lobbied hard in recent weeks in an attempt to convince Gov. Gavin Newsom to allow the park to reopen.
Disney World, which comprises four separate Disney theme parks near Orlando including the Magic Kingdom, reopened this summer with restrictions amid the pandemic, but attendance has been down sharply.
“In light of the prolonged impact of COVID-19 on our business, including limited capacity due to physical distancing requirements and the continued uncertainty regarding the duration of the pandemic—exacerbated in California by the state’s unwillingness to lift restrictions that would allow Disneyland to reopen—we have made the very difficult decision to begin the process of reducing our workforce at our Parks, Experiences and Products segment at all levels, having kept non-working Cast Members on furlough since April, while paying healthcare benefits,” Disney Chairman Josh D’Amaro said.
“Approximately 28,000 domestic employees will be affected, of which about 67 percent are part-time. We are talking with impacted employees as well as to the unions on next steps for union-represented cast members,” he continued.
“Over the past several months, we’ve been forced to make a number of necessary adjustments to our business, and as difficult as this decision is today, we believe that the steps we are taking will enable us to emerge a more effective and efficient operation when we return to normal.
“Our cast members have always been key to our success, playing a valued and important role in delivering a world-class experience, and we look forward to providing opportunities where we can for them to return.”
The Walt Disney Co. recently reported sharp year-over-year third-quarter revenue drops, thanks in part to the pandemic-prompted closure of its theme parks. Disney reported third-quarter revenue of $11.8 billion, a 42 percent drop from last year’s third quarter.
The company’s Parks, Experiences and Products segment saw an 85 percent revenue drop from the third quarter of last year.
The company had originally planned to reopen its Disneyland and California Adventure theme parks in Anaheim on July 17, but those plans were scrapped as the state saw a surge of COVID-19 cases. That surge prompted a delay in the state’s release of operating protocols for large venues such as theme parks.
The Downtown Disney shopping and entertainment district reopened to the public on July 9, although some individual businesses remained closed.
Mike Lyster, a spokesman for the city of Anaheim, said city officials are not privy to exactly how many layoffs will happen in Anaheim, but added, “We know it’s in the thousands of people.”
City officials “have been warning about this for the past few weeks,” Lyster said.
“Unfortunately, what we feared was the next shoe to drop was widespread layoffs,” he said.
“Unfortunately, many hotels and other business have been in the same situation—that is, furloughing workers and trying to keep them on paying health care and other things now going on seven months. It is decision time, and for many of them, it will exacerbate the downturn we are seeing in our city.”
Sources say state public health officials have suggested Disneyland could reopen at 10 percent occupancy, but theme park officials countered that it would cost more to do that than to remain closed.