The Walt Disney Co. plans to stop paying more than 100,000 employees, mainly cast members, this week in its efforts to save more cash as the coronavirus or Covid-19 lockdown continues, the Financial Times reported.
The affected employees are asked to seek state benefits, while Disney will continue to provide full healthcare benefits for staff placed on unpaid leave.
The entertainment major expects the suspension of pay to nearly half of its workforce would help save up to $500 million per month across its theme parks and hotels.
Earlier, the company had said it would furlough certain non-essential US employees starting April 19, and urged them to apply for the extra $600 a week of federal support available through the Government’s $2 trillion coronavirus stimulus package. Meanwhile, all affected workers will remain Disney employees through the furlough period.
In Florida, which is home to more than 70,000 cast members in Orlando Disney parks, the state unemployment payments are up to $275 a week for 12 weeks.
Further, at Disneyland Paris, Disney will stop salary payments for most of the 17,000 staff, who will be placed on France’s “partial activity scheme”, in which the government will cover up to 84 percent of their net salary.
Disney had temporarily closed its theme parks and hotels in the US and Europe in mid-March in its fight to stop the spread of coronavirus. The company also halted its TV and film production, closed movie theaters and delayed film releases. Despite this, Disney had committed to full pay and benefits for all employees through April 18.
Meanwhile, the company protects executive bonus schemes and a $1.5 billion dividend payment due in July.
Disney has already announced various measures to save its cash. The company recently said its Chairman and former Chief Executive Robert Iger has agreed to forgo his salary for the year while his successor, CEO Bob Chapek, will take a 50 percent pay cut. The company also reduced base salary among a broad group of its executive level employees.
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