The Walt Disney Co. will lay off 28,000 employees due to the prolonged closure of the Disneyland Resort theme parks and the overall business uncertainty created by the coronavirus.
In a letter to cast members on Tuesday, Disney Parks, Experiences and Products Chairman Josh D'Amaro said the coronavirus-catalyzed shutdown along with adjusting to a new way of operating at Walt Disney World in Florida and California's "unwillingness" to release health and safety guidelines to reopen the Disneyland Resort theme parks led to the decision to layoff the employees, most of whom are part-timers.
D'Amaro said 28,000 domestic employees, of which 67 percent are part-time workers, will be let go. Disney did not specify how many employees from each resort will be laid off.
Unite Here Local 11, the union representing Disneyland Resort hotel workers, told Spectrum News 1 that it has been notified of the layoffs but did not provide more information.
Spectrum News 1 emails to Disney and the governor's office for further comment were not returned.
"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," D'Amaro said in a statement released by Disney. "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."
D'Amaro's letter comes a week after Disney and local business leaders and city officials pleaded with California Gov. Gavin Newsom to reopen Disneyland, Disney California Adventure and other theme parks across the state.
Disneyland, one of the state's top five employers and Orange County's No. 1 employer, has been closed since mid-March when the coronavirus pandemic began.
While Walt Disney World in Florida reopened a couple of months ago, the closure of the Disneyland Resort, which includes two theme parks, three hotels and a retail strip, has led to a ripple effect of closures, furloughs, and layoffs from the other businesses that rely on the 20 or so million tourists that visit Disneyland Resort annually. In the six or seven months the resort has been mostly shut down, the city is facing a $100 million deficit. Only half of Anaheim's 120 or so hotels have reopened and several business that abutt Disneyland in Anaheim have closed or are operating with limited hours. Downtown Disney, Disney's retail strip, reopened in July with several health restrictions and at reduced capacity.
Anaheim spokesman Mike Lyster said the Disney layoffs are the exact scenario the city and local business leaders have been warning the governor about. Lyster previously said that he fears a second Great Recession could come if Disneyland does not reopen.
Orange County, which had an unemployment rate of 2.4 percent in December before the coronavirus, is at 12.3 percent as of July, according to the U.S. Bureau of Lab. Anaheim has a 15 percent unemployment rate or about 26,000 workers are out of work, city officials said.
"We knew the next shoe to drop is layoffs," Lyster told Spectrum News 1. "We fear that this is just the beginning and that there will be more. More businesses in and around the resort are in the same position. First, it was furloughs and keeping employees on the books for healthcare. But now, six to seven months in and with no clear roadmap or guidelines for reopening, employers are in a difficult position where they have to make decisions now and that these decisions impact people's lives."
Lyster is calling on the governor to issue the much-awaited health and safety guidelines to reopen Disneyland and other theme parks across the state.
"We need guidelines just like restaurants, stores, and family entertainment centers. It doesn't mean we will open tomorrow or if the park will be how it was last year," Lyster said. "There is a safe middle path forward to save jobs and create economic recovery. This brings home how real it is. Wiithout the ability to have some sort of idea of when theme parks can reopen, more businesses in Anaheim are going ot have make these kinds of difficult deicisons."